PCCW, a Hong Kong listed company, has terminated discussions over its assets sale with TPG-Newbridge, a US private equity group, and Australia’s Macquarie Bank.
PCCW said in a statement filed with the Hong Kong stock exchange that China Netcom, which has a 19.93 percent shareholding has “repeatedly indicated to the company its opposition to such an asset sale and, despite persistent endeavours to develop an acceptable structure, all attempts to do so have failed.”
“The board has therefore concluded that it has explored all possible avenues to pursue the expressions of interest by Macquarie and TPG-Newbridge and since it was not able to develop firm proposals that would lead to binding contracts with either (parties)…the board has decided to terminate the discussions.”
Macquarie and TPG-Newbridge said they wanted to buy the telecommunications and media assets of PCCW in June. Media reports suggest the proposed offers were in the vicinity of $7 billion.
The offers were subsequently thwarted by an unexpected sale of a 22.7 percent stake held by Richard Li, PCCW’s largest shareholder, to a local financier, Francis Leung. Leung is known for his close ties to China and Li’s father, Li Ka-shing, Asia’s richest man.
Hong Kong’s lawmakers have expressed concerns about the lack of transparency in the deal, and will hold a hearing next month to determine if minority shareholders’ interests have been undermined.
Macquarie has declined to comment on the latest development, while a spokesperson for TPG-Newbridge would only say: “we support the arrangement for all parties involved.”