Mainland giant's two-step strategy revealed after $2.2b takeover bid for Peoples
China Mobile (Hong Kong), which surprised the market yesterday with a $2.2 billion bid for 66.5 per cent of China Resources Peoples Telephone, may try to acquire a stake in SmarTone Telecommunications Holdings.
The two-step strategy would be aimed at consolidating the market and making better use of the companies' network infrastructure, sources said, adding that the move might be a roundabout way of getting a third-generation (3G) licence, which SmarTone holds but Peoples Telephone does not.
Sources said, however, that talks were at a preliminary stage. China Mobile and SmarTone, Hong Kong's third-largest mobile operator, declined to comment.
'Sun Hung Kai Properties, which controls 52 per cent of SmarTone, is not going to offload all of its investment. However, it could use some leverage to gain access to China Mobile's 100 million users and secure a better business model for both,' sources said.
China Mobile signed a non-binding memorandum of understanding yesterday to acquire 66.5 per cent of Peoples from two major shareholders - China Resources (Holdings) and Onwel Capital, a company owned by Peoples vice-chairman Michael Leung Kai-hung - at $4.55 per share.