Inventor floats PCCW buyout
Local inventor Wong Kam-fu surprised the market yesterday with a proposal to buy PCCW, the largest telecom operator in the city, which is controlled by Richard Li Tzar-kai.
Mr Wong, chairman of Hong Kong-listed Smart Rich Energy Finance (Holdings), said he hoped the deal would result in each PCCW shareholder receiving HK$6 per share, a 23.7 per cent premium to its closing price yesterday of HK$4.85.
'Under my proposal, the new shareholder structure of PCCW would be well diversified, as no single shareholder could hold more than a 5 per cent stake,' he said.
He told a news conference he had sent a letter of intent to Mr Li a week ago, and said his plan had the backing of the mainland authorities.
Mr Li, PCCW's chairman, said the company, of which mainland fixed-line phone operator China Netcom owns nearly 20 per cent, was not aware of any feasibility report.
Mr Wong retorted that he had sent the proposal to Mr Li himself.
Mr Wong said his offer would be worth HK$68 billion and would be financed by a bank loan and a share offering. He said he was being advised on the deal by Australian bank Macquarie and French bank Societe Generale.
A year ago, Macquarie made an abortive attempt to buy PCCW's core assets in a deal said to have been worth as much as US$7.3 billion. The central government opposed it . The offer led Mr Li, younger son of billionaire Li Ka-shing, to try to sell his stake to financier Francis Leung Pak-to. He failed because of objections by minority shareholders of Pacific Century Regional Developments, through which Mr Li holds most of his PCCW stake.
Mr Wong introduced the first Chinese-language pager and says his products have nearly 500 patents.
Shares in Smart Rich rose 13.7 per cent yesterday.