PCCW chairman Richard Li Tzar-kai and the firm's second-biggest shareholder, China Netcom Group Corp, plan to buy out other shareholders in the company to take advantage of the low share price, sources said.
A proposal was expected to be tabled at an emergency board meeting today, they said, adding that HSBC would arrange financing for the deal.
'The sense of the board is that they will be presented with a take-private transaction led by the two lead shareholders and that is already creating controversy at the board level,' said a source. 'They (board members) are not happy about the situation because they feel they have to protect minority shareholders and this looks and smells like majority shareholders taking advantage.'
Some members felt a buyout deal should be offered at about HK$6 a share but worried that Mr Li and Netcom would not bid that high, sources said.
Shares in PCCW, the city's biggest telecommunications services provider, were suspended from trading yesterday, as were those of its major shareholder, Singapore-listed Pacific Century Regional Developments (PCRD).
Netcom, a mainland fixed-line operator which is merging with mobile carrier China Unicom, owns 19.94 per cent of PCCW. Mr Li and PCRD together control 28.29 per cent.