PCCW may revive an attempt to bid for British telecommunications firm Cable & Wireless (C&W) this week with a ?2 billion (about HK$25.35 billion) offer, according to reports from London. Chairman Richard Li Tzar-kai is expected to take another stab at the company by seeking a meeting with C&W chairman Richard Lapthorne, the Sunday Times reported. Other British media reports suggested Mr Lapthorne was ready and willing to talk, despite snubbing an approach by PCCW last week. 'Why should we not sit down and talk,' Mr Li was quoted as saying in the newspaper. 'I thought that is what we are paid to do.' He stressed: 'Our intentions are not hostile at all. We can work together to enhance shareholder value for both companies.' A hostile bid would prevent Mr Li from gaining access to key financial information on the troubled British firm. PCCW confirmed it was still interested in C&W and did not rule out the possibility of putting forward a bid, should the two companies hold a meeting. However, PCCW chief communications officer Martin O'Connor played down the London reports, saying the Hong Kong firm had not had any such contact and no offer had been made. 'At the moment the position we're in is exactly the same as last week, that is we put a letter in and [it] got rebuffed. No decision has been taken. We would only proceed further if we're offered a reasonable opportunity to undertake due diligence,' Mr O'Connor said. Reports had suggested Mr Li would put forward a 100 pence-a-share cash offer to buy C&W's shares - a 35 per cent premium to C&W's price - valuing the carrier at ?2.4 billion. It was understood only a portion of the bid would be contributed by PCCW. Privately held investment company Texas Pacific, which has expertise in restructuring companies, was reported to be backing PCCW in its plan to take over C&W. PCCW chief financial officer Alex Arena said last week that PCCW and Texas Pacific knew each other well and had dialogue regularly, but he refused to say if Texas was involved. C&W's attitude towards PCCW's preliminary approach for a takeover discussion appeared to soften after the company faced criticism from Hong Kong shareholders and critics. Mr Lapthorne, the British carrier's newly appointed chairman, had made a U-turn in his position towards PCCW's approach by signalling his preparation to open talks with Mr Li on the possible sale of the struggling British carrier, the Independent on Sunday reported. British newspapers said investors would press the company to accept a discussion with PCCW for a possible asset sale. Mr Lapthorne had been criticised for acquiring one million shares of C&W at 57 pence each on January 10, the day he was appointed as the new head of C&W and just weeks after PCCW had approached the carrier for takeover talks. Meanwhile, C&W directors started accumulating shares in defence of any possible takeovers. Ken Clayton, company secretary of the London-based firm with 13 other directors or related parties had bought 2,894 C&W shares to increase their combined holding of 142,636 shares, the London Stock Exchange disclosed on Friday. Company directors and two financial advisers - Goldman Sachs for PCCW and Merrill Lynch for C&W - were required to make disclosures to the exchange from last Thursday - as were shareholders of PCCW and C&W who had more than 1 per cent ownership, as the two companies formally entered the offer period. But the news about a possible renewed attempt by PCCW will probably put pressure on PCCW's share price as it would refresh investors' worries on the carrier's financial position. Analysts said PCCW would have to expand overseas to pay for future growth as its Hong Kong fixed-line business was declining.
