Telecommunication services provider Citic 1616 Holdings has acquired from its parent company, Citic Pacific, a 20 per cent stake in Macau telecommunications operator Companhia de Telecomunicacoes de Macau (CTM) for HK$1.4 billion.
It said yesterday it would pay HK$467 million in cash and the remaining HK$933.4 million in new shares to Citic Pacific at HK$2.30 per share, which was the closing price yesterday.
Citic Pacific's stake in Citic 1616 will be raised from 53 per cent to 61 per cent on completion of the deal.
Norman Yuen Kee-tong, the chief executive of Citic 1616, said the acquisition price was reasonable considering that other Hong Kong telecommunication companies traded at higher multiples.
'We expected to be able recover the cost within 10 years,' Yuen said.
CTM is currently the exclusive operator of fixed voice services in Macau. It also provides mobile and internet services. By December 2008, the net asset value of CTM was about 1.19 billion patacas.