Newbridge Capital, the private equity investment firm, aims to acquire a stake in Richard Li Tzar-kai's telecommunications flagship business through a privatisation scheme involving PCCW's major shareholder, Pacific Century Regional Developments (PCRD). PCRD is a Singapore-listed investment holding company which has a 23 per cent stake in PCCW and 46.9 per cent of Pacific Century Insurance Holdings (PCI). Newbridge is leading the Texas Pacific Group in the consortium's proposal to buy out the minority shareholders of PCRD, who hold 25 per cent of the company, at 27 Singapore cents ($1.29) per share. The offer represents a 27.6 per cent premium over the weighted average price over the past three months. Pacific Century Group Holdings, which controls the other 75 per cent of PCRD, will neither sell nor buy shares in the transaction and has said it will support the proposal if Newbridge's bid succeeds. This would bring about a new structure at PCCW, with chairman Mr Li remaining the single largest shareholder, while Newbridge would hold over 5 per cent indirectly through its stake in PCRD. 'We do want to invest in Richard Li's assets of two companies - PCCW and PCI - at the holding company level under one transaction,' said Tim Dattels, the managing director of Newbridge. 'PCCW has done a good job in Now Broadband TV and leads the world internet protocol television (IPTV) market. We also look at the growth potential of IPTV in China.' Newbridge has made several investments in regional telecommunications carriers such as Korean-based Hanaro Telecom and Japan Telecom. 'The buyout proposal gives the minority shareholders an opportunity to exit at a premium of nearly 30 per cent as the share price has been plagued by lack of liquidity,' said a source close to PCRD. He dismissed a suggestion that it was a move to appease minority shareholders after its 46.9 per cent-held PCI overstated its profit by $96.96 million for the first nine months of the financial year. 'PCRD may pave the way for listing in Hong Kong after it is privatised,' said Louis Wong, a director of Phillip Securities. Additional reporting by Enoch Yiu