Cable & Wireless HKT's board has unanimously recommended Pacific Century CyberWorks' proposed merger offer.
HKT chairman Brian Smith yesterday said the board had completed its analysis of the CyberWorks offer and was recommending shareholders to 'vote in favour of the scheme'.
However, ING Barings, HKT's independent financial adviser, cautioned the operator's minority shareholders that the merged entity would have a significantly high-risk profile.
It also warned CyberWorks shares might be subject to high volatility and advised risk-averse investors to reduce their exposure to the combined company by either disposing of some or all of their HKT shares before the last dealing day, August 1, if the share price was above their net realisable value under CyberWorks' proposed offer prices.
Alternatively, if the shares were trading below the offer prices before the HKT election deadline on July 3, shareholders could take the offer and sell new CyberWorks shares in the market after the scheme became effective.
ING Barings said the Internet-focused activities were 'largely unproven' and were 'expected to require substantial capital investment'.
