China Netcom Group Corp, the mainland's smaller fixed-line operator, yesterday announced that Spanish telecommunications giant Telefonica would raise its stake in the company to 7.22 per cent for HK$3.5 billion, according to a statement to the stock exchange.
This was the second time in a week that Telefonica notified the market that it would increase its stake in Netcom.
Telefonica announced on Wednesday that it acquired 2.2 million shares at an average price of HK$24.61 per share last month, taking its stake to 5.01 per cent, up from 4.98 per cent previously.
Netcom announced yesterday that shareholders Chinese Academy of Sciences Holdings, Information and Network Centre of State Administration of Radio, Film and Television, China Railways Telecommunications Centre, and Shanghai Alliance Investment, which hold a combined 2.2 per cent stake, or 148 million Netcom shares, would sell their holdings to Telefonica International for HK$23.97 per share.
Completion of the deal is subject to approval from the mainland authorities.
'The market expects Telefonica to further increase its stake in Netcom to 9.9 per cent, and that this would support the share's price performance,' a telecommunications analyst said yesterday.