HONG KONG – Hong Kong’s Telecommunications Authority has given its consent to privatization plans laid out by local telco giant PCCW.
The government agency said that PCCW’s proposals would not have a significant impact on competition in Hong Kong’s telecommunications market, adding that a full report would be published in coming weeks.
The plan, which will see PCCW’s chairman Richard Li and mainland Chinese telco China Netcom buying out minority shareholders at HK$4.20 ($0.54) a share, is expected to cost around $2 billion and will leave Li and Netcom with 66.7% and 33.3% of the company respectively.
The move represents one less obstacle in PCCW’s ongoing privatization saga. Earlier this month, San Francisco-based shareholder-advisory firm Glass, Lewis & Co. recommended that minority shareholders reject the deal, citing an undervalued offer price, as well as an absence of “compelling strategic rationale” for taking the company private. Shareholders are scheduled to vote Tuesday on the proposal.