HKBN, private-equity group lead bidding for Wharf’s telecoms unit
Doubts over HKBN’s ability to quickly raise financing for a deal widely speculated to be worth more than US$1 billion
Hong Kong Broadband Network (HKBN) is going head-to-head with the consortium of MBK Partners and TPG Capital as front-runners in the bidding for the fixed-line telecommunications business of property giant The Wharf (Holdings), according to three people with knowledge of the matter.
Speculation has been rife that the conglomerate’s Wharf T&T operation may fetch a purchase price of just over US$1 billion, making it the latest big-ticket corporate telecommunications acquisition in Hong Kong since HKT bought CSL New World Mobility for US$2.43 billion in 2014.
The three sources said HKBN, the city’s second-largest fixed-line residential broadband operator, had submitted the most aggressive bid to acquire Wharf T&T, which runs enterprise broadband, data centre and system integration services.
Wharf’s divestment plan, which was first reported by Reuters in June, had also attracted US private equity firm KKR and mobile network operator SmarTone Telecommunications as bidders, the sources said.
Alfred Lau, an analyst at Bocom International, told the South China Morning Post on Monday that he estimated the value of Wharf T&T to be “roughly US$500 million”.
“If the Wharf group can raise about US$1 billion from the sale, then that would be a positive and result in a gain of US$1 per share,” Lau said.