Li Ka-shing (李
Telefonica SA, Europe's second-largest phone company, said on Sunday that it would buy 8 percent of PCCW for 323 million euros(US$415 million) and combine its stake with the 20 percent held by China Network Communications Group (中國網通集團), China's second-largest fixed-line company.
The participation of Li and Telefonica -- which owns 5 percent of China Netcom's Hong Kong-listed unit -- means former Citigroup Inc banker Francis Leung (梁伯韜) can complete his purchase of Richard Li's 23 percent controlling stake in PCCW. China Netcom and Telefonica will have management control of PCCW with the 28 percent stake.
"This should open up more opportunities in the mainland for PCCW," said Kenny Tang, research director at Tung Tai Securities Ltd in Hong Kong. "It's different from when they only had a minority interest."
PCCW's pay-television and mobile-phone ventures with China Netcom have faltered since they were set up after the Chinese company paid US$1 billion for a 20 percent stake in PCCW last year.
PCCW, China Netcom and Telefonica have signed an agreement to develop PCCW's business, including Internet-based television, call-center services and high-speed "third generation" cellular service, should Netcom receive a license, people familiar with the deal said last week.
Shares of PCCW rose 0.5 percent to HK$5.05 at 3:20pm in Hong Kong. The stock has gained 5.8 percent this year, compared with a 27 percent advance in the benchmark Hang Seng Index.
The purchases by the Li Ka-shing foundation and Madrid-based Telefonica "will remove all the uncertainties surrounding PCCW in the past few months, and both shareholders and management should be happy to see this," Tang said.
The Li Ka Shing Foundation Ltd will buy 10 percent of PCCW shares for HK$6 each from Leung and the Li Ka Shing (Canada) Foundation will buy 2 percent at the same price, Leung said in a statement in Hong Kong newspapers yesterday. Both charitable foundations are controlled by Li.
Li Ka-shing is also providing some of the financing Leung will use to purchase the 2.7 percent stake in PCCW that he will retain, the statement said.
The financing from his father for Leung's purchase means Li will have sold out of PCCW, whose shares have dropped more than 90 percent from their peak in 2000, when he bought control from the UK's Cable & Wireless Plc.
"The father finally came out to rescue his son so he can concentrate on something else," Francis Lun, general manager at Fulbright Securities Ltd, said in a televised interview yesterday. "Li Ka-shing is not the big winner. Netcom is the winner."
Beijing-based China Netcom blocked Li's previous attempt this year to sell PCCW's phone and media assets at a higher price on the grounds that the units should stay in local hands.
PCCW provides services to 68 percent of Hong Kong's fixed-line phones. This transaction avoids those concerns.
China Netcom's venture with Telefonica will be the largest shareholder in the company with a 28 percent stake. Telefonica has the right to swap its 8 percent stake in PCCW for more shares in China Netcom Group Corp (Hong Kong) Ltd, China Netcom's listed unit, of which it already owns 5 percent.
"Netcom wants to make sure that this shareholding issue doesn't happen again, and the way to do it is to become the largest shareholder," Francis Cheung, an analyst at CLSA Ltd, said in a telephone inter-view. "Telefonica is doing Netcom a favor by getting into PCCW."
NATIONAL SECURITY: The Chinese influencer shared multiple videos on social media in which she claimed Taiwan is a part of China and supported its annexation Freedom of speech does not allow comments by Chinese residents in Taiwan that compromise national security or social stability, the nation’s top officials said yesterday, after the National Immigration Agency (NIA) revoked the residency permit of a Chinese influencer who published videos advocating China annexing Taiwan by force. Taiwan welcomes all foreigners to settle here and make families so long as they “love the land and people of Taiwan,” Premier Cho Jung-tai (卓榮泰) told lawmakers during a plenary session at the Legislative Yuan in Taipei. The public power of the government must be asserted when necessary and the Ministry of
Proposed amendments would forbid the use of all personal electronic devices during school hours in high schools and below, starting from the next school year in August, the Ministry of Education said on Monday. The Regulations on the Use of Mobile Devices at Educational Facilities up to High Schools (高級中等以下學校校園行動載具使用原則) state that mobile devices — defined as mobile phones, laptops, tablets, smartwatches or other wearables — should be turned off at school. The changes would stipulate that use of such devices during class is forbidden, and the devices should be handed to a teacher or the school for safekeeping. The amendments also say
CONSISTENT COMMITMENT: The American Institute in Taiwan director said that the US would expand investment and trade relationships to make both nations more prosperous The US would not abandon its commitment to Taiwan, and would make Taiwan safer, stronger and more prosperous, American Institute in Taiwan Director Raymond Greene said. “The US’ commitment to Taiwan has been consistent over many administrations and over many years, and we will not abandon our commitment to Taiwan, including our opposition to any attempt to use force or coercion to change Taiwan’s status,” he said in an exclusive interview with the Liberty Times (the sister newspaper of the Taipei Times) on Friday last week, which was published in the Chinese-language newspaper yesterday. The US would double down on its efforts
SECURITY: President William Lai has announced plans to restore the military court system that was disbanded in 2013 to address a surge in Chinese infiltration efforts Taiwan plans to reinstate military judges to hear Chinese espionage cases and other offenses involving Taiwanese service members, President William Lai (賴清德) said yesterday. There would be a review and legal amendments “to reinstate the military trial system,” he told reporters after a national security meeting. “Military judges will return to the front line,” Lai said. Military judges would work “alongside prosecutorial and judicial agencies to handle criminal cases involving active-duty military personnel accused of treason, aiding the enemy, leaking classified information, dereliction of duty, insubordination and other military offenses,” he said. The number of people prosecuted for spying for Beijing has risen sharply,
RSS