Market watchers expect stock to come under pressure but firm will remain an attractive takeover target PCCW's prospects in the high-growth mainland market and the outlook for its share price are dim after minority shareholders blocked chairman Richard Li Tzar-kai's plan to sell his stake, fund managers and analysts said. Such an expectation comes because the company is still headed by Mr Li, whose attempt to sell his stake reflects that he does not want to run the company, they said. At the same time, they said PCCW's second-largest shareholder China Netcom Group, caught off guard by Mr Li's sell-off plans, considers him an unwelcome partner. 'It's a real stalemate situation,' said one hedge fund manager who recently sold down his stake in the company. 'Had the deal gone through, you would have had Francis Leung Pak-to go in there and repair bridges with the Chinese and then there would be some upside.' Minority shareholders of Pacific Century Regional Developments, a Singapore-listed firm controlled by Mr Li, spurned an offer yesterday from former banker Mr Leung, two charities owned by Mr Li's father Li Ka-shing and Spanish company Telefonica to buy a 22.7 per cent stake in PCCW for HK$9.2 billion. 'Shareholders should be very disappointed at the result,' said Auyeung Tat, a fund manager at Apex Capital. 'The situation becomes murky again ... in the short term, PCCW shares will be under pressure.' The shares have plunged 95 per cent since it bought control of Cable & Wireless HKT in 2000 to become Hong Kong's dominant telecommunications service operator. Kenny Tang Sing-hing, an associate director of Tung Tai Securities, said the shares of PCCW will be under heavy selling pressure as shareholders will not get the special dividend that Richard Li promised if the deal was approved. Many market observers expect a period of quiet after the number of iterations the deal has seen since it all started earlier this year. US buyout firm TPG-Newbridge and Macquarie Bank failed in their bids to buy PCCW assets after Beijing objected to them falling into foreign hands. The two suitors would not comment. Local tycoons appear to be uninterested as none, apart from the elder Mr Li, joined Mr Leung's consortium. That leaves Netcom and other mainland firms likely buyers. 'Everyone needs a period of stability where they can just focus on the business,' said one fund manager who asked not to be identified. 'It's been deals and deals and now they have to turn back and focus on the business and let management get back to management.' However, any quiet will not last long as the company is likely to remain the object of acquisitional interest despite Beijing's sentiments to the contrary. Everyone agrees that PCCW has a lot going for it, particularly the Now Broadband television unit which has attracted a growing number of subscribers and has recently won the exclusive right to broadcast English Premier League football. PCCW, with more than 700,000 subscribers, has the most broadband television subscribers of any service provider in the world. 'PCCW has the management and technical experience that could make it a bid target again with interested bidders including telecoms operators and private equity, especially if recent management disputes escalate and the stock takes a hit,' said Cyrus Mewawalla, an analyst at broker Westhall Capital.