Mogul mounts $2 billion bid on company
Tycoon Richard Li Tzar-kai is mounting a $2 billion bid to take private PCCW, the conglom that owns Hong Kong’s leading pay TV operator Now TV.Li’s Pacific Century Regional Developments and telco group China Network Communications said Tuesday that they will offer HK$4.20 (54¢) per share for the 52% of the company they don’t already own. That offer is 53% higher than the price at which the stock was recently suspended and values the entire group at $3.7 billion. The widely signaled privatization move follows an attempt to auction off the HKT telephony and media division that collapsed last month when asset values tumbled and the global credit squeeze limited private equity bidders’ ability to raise loan finance. Li, son of billionaire Li Ka-shing, previously attempted to sell PCCW for $7 billion to U.S. buyout group TPG and Australian financier the Macquarie Group. But that move was blocked by China, which feared that strategic media and telco assets would fall into foreign hands. Taking the conglom private is regarded in financial circles as a way for Li to exercise more control over a final disposal. It also requires approval of PCRD minority shareholders. Launched in late 2003, Now TV is widely regarded as the commercial pioneer of Internet Protocol TV. It had 927,000 subscribers as of the end of June and had overtaken conventionally delivered I-Cable to become the territory’s leading pay TV provider. Last year PCCW earned net profits of $193 million on revenue of $3.05 billion.