Pacific Century CyberWorks has raised HK$3.87 billion to fund the acquisition of a 23 per cent interest in SoftNet Systems - an Internet company listed on Nasdaq in the United States - in the largest placement this year in Hong Kong. Richard Li Tzar-kai's information-technology flagship raised the cash yesterday through a placement of 635 million shares. The issue's price of HK$6.1 per share represented an 8.27 per cent discount to the counter's closing of $6.65 yesterday. The share price fell 2.2 per cent on the day. CyberWorks could raise up to HK$4.45 billion if the company exercises an option to offer an additional 95.25 million shares at the same price. SoftNet announced yesterday that CyberWorks had agreed to pay US$128.75 million for five million shares. The per-share price under the agreement is equal to SoftNet's Monday closing of US$25.75. CyberWorks and SoftNet also agreed to form a joint venture - Pacific Century SoftNet - that will market products and services to cable-television operators serving 110 million Asian households. SoftNet said the companies would collaborate on broadband Internet and satellite projects. Three weeks ago, CyberWorks forged an alliance with US-based Internet investment company CMGI in a HK$2.71 billion share-swap arrangement aimed at tapping the Internet business in Asia. Mr Li said CyberWorks would focus on investments in companies that could bring strategic value to the company. 'We are looking more into acquisitions that are of a strategic nature, which could help strengthen our Internet broadband project,' he said. 'We will work closely with [any acquisitions], and we expect them to bring direct and immediate help [to our business].' Internet-content provision is only one of five acquisition categories the company was considering, Mr Li said. He did not name the other categories. Fund managers said the timing of CyberWorks' share placement was a 'smart move'. They pointed to plans by CNOOC, the Hong Kong-listed arm of the mainland's third-largest oil company, to raise up to US$2.5 billion in an initial public offering combined with an international placement that began yesterday. Meanwhile, China Telecom hopes to raise US$1.65 billion in a share placement expected to take place by the end of this month. In addition, the Government plans to launch its Tracker Fund on November 12. However, some fund managers and legislators criticised CyberWorks' unexpected move, coming only two weeks after vice-chairman Francis Yuen Tin-fan said the company was not planning any share placements within the next six months except for large acquisitions. CyberWorks plans to use only HK$1 billion of the proceeds of yesterday's placement for the purchase of the SoftNet stake. The remaining HK$2.9 billion is to be reserved to finance future acquisitions, a CyberWorks spokesman said. Legislator Fung Chi-kin questioned the integrity of CyberWorks' management. 'The placement sends a bad signal to investors,' he said. Daiwa SB Investment chief investment officer Ambrose Chang said the appearance of a large volume of CyberWorks shares at such a big discount could also exert downward pressure on the market.