Top Biz News

China Netcom welcomes PCCW deal

By Jonathan Yeung (China Daily)
Updated: 2006-07-12 08:41

"It is still possible for Leung to invite Maquarie or TPG to be partners in the consortium as minority shareholders," said Steven Leung, director of institutional sales for UOB-Kay Hian.

"He is a very experienced investment banker and this is one way for him to solve the problem," Steven Leung added.

The former chairman of Citigroup's Asia investment arm, Leung said on Monday that he "will not rule out the possibility of inviting other parties to invest in PCCW later."

Francis Lun, general manager of Fulbright Securities also said Leung's ownership of PCCW could be "brief," although Leung said on Monday he eyes long-term investment.

"I think he wants to work out a deal so that he can sell to Macquarie or TPG," said Lun.

The two companies have previously offered US$7.55 billion and US$7.3 billion respectively to buy PCCW's main phone and media assets.

Investment banks and rating firms also downgraded PCCW, pending further developments.
"We see the potential acceptance of this bid as negative for PCCW's share price and believe that the share price is unlikely to trade reflecting an acquisition premium," Deutsche Bank said in a research note, downgrading the stock to "hold" from "buy."

Standard & Poor's adjusted the stock down to "negative," saying that it "would take time to see how PCCW solves a series of uncertainties arising after the bid such as those regarding the company's future financial structure, management, operation, and possible restructuring of its business."