Hutchison Telecom shares surge on confirmation of spin-off talks
Shares in Hutchison Telecommunications International surged more than 10 per cent yesterday after the company confirmed it was in advanced talks to spin off its Hong Kong and Macau telecommunications businesses.
Hutchison Telecom said in a clarification announcement that it and its advisers were in discussions concerning a possible spin-off and a separate listing by way of distribution in specie not involving any raising of new capital.
'No decision has been made by the board up to the date of this announcement,' it said.
Hutchison Telecom shares yesterday rose 10.99 per cent to close at HK$2.02.
The share rise was in response to a South China Morning Post report that the company could announce the plan as early as tomorrow when the company announces its final results for last year.
Hutchison Telecom operates 3G and 2G mobile-telephone services in Hong Kong and Macau, with more than 2.3 million subscribers. It also has a fixed-line operation under Hutchison Global Communications.
'The spin-off should help realise the value of the Hong Kong and Macau operations,' a fund manager said yesterday.
'However, in such a competitive market, pure telecommunications plays in Hong Kong may not raise investor interest.'
Hutchison Telecom also had no immediate cash needs within Hong Kong, the fund manager added.
CLSA estimated the spun-off assets could be valued at HK$10 billion to HK$12 billion.
Locally listed telecommunications companies with core operations in Hong Kong include PCCW, SmarTone Telecommunications Holdings, City Telecom and Hutchison Telecom.
PCCW, the city's biggest telecommunications firm jointly owned by chairman Richard Li Tzar-kai and China Unicom Group, is pending a HK$15.9 billion buyout deal to take the company private.
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Hutchison Telecom shares rose 10.99 per cent yesterday to HK$2.02
CLSA estimates the assets to be spun off could be valued at up to, in HK$: $12b
