PCPD shareholders vote against PCCW buyout, seek higher price

PUBLISHED : Friday, 18 April, 2008, 12:00am
UPDATED : Friday, 18 April, 2008, 12:00am

Pacific Century Premium Developments shareholders yesterday voted against a buyout by its controlling shareholder PCCW, demanding more for their holdings.

The developer of the Cyberport residential project Bel-Air held a special meeting of shareholders to seek approval for the buyout but were knocked back as investors demanded a higher price for their shares.

PCCW planned to buy all the stock it did not own in PCPD for HK$2.85 per share, for a total consideration of HK$2.6 billion.

Shares of PCPD were at HK$2.76 before being suspended yesterday.

About 62.1 per cent of the number of independent shares at the meeting voted against the deal while 37.8 per cent voted in favour, according to a joint announcement of PCCW and PCPD.

According to the company's buyout document, the number of votes cast against the resolution totalled not more than 10 per cent of all shares held by independent shareholders.

The result was widely expected as some shareholders remain sceptical about the firm's plan to sell assets. PCPD wants to sell its flagship Pacific Century Place in Beijing.

Before the meeting, hedge fund Elliott Capital Advisers boosted its stake in PCPD to 16.11 per cent from 7.09 per cent.

There was speculation Elliott had pushed PCCW to raise its offer, which was rejected.

Elliott first reported its holdings in the company on February 20, after the buyout plan was announced.

One shareholder yesterday said PCCW should increase the offer price to at least HK$4 per share.

'PCCW should buy our shares for between HK$4 and HK$5,' said a Ms Chan, who declined to give her full name. 'The HK$2.85 is too low and unreasonable. The company should distribute a special dividend to shareholders once they confirm they plan to sell Pacific Century Place.'

A telecommunications analyst said it was unclear what Pacific Century management wanted to do with the company.

'While the company is under a privatisation scheme by PCCW, it plans to sell the flagship properties in Beijing for cash? It seems strange,' said the analyst, who declined to be named.

Market watchers speculate PCCW may acquire all of PCPD's assets as a way to indirectly privatise the company.

PCCW now holds 61.53 per cent of PCPD. Sources close to the company said it would continue to grow the business, but it might need funding for future plans.