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Sun, 13 Feb 2000, 4:19am EST
SingTel, Cable & Wireless HKT, CyberWorks Hold Talks on Possible Merger
By Linus Chua
HKT, SingTel, CyberWorks Meet Through Weekend on Merger Plans
Hong Kong, Feb. 13 (Bloomberg) -- Officials from Cable & Wireless HKT Ltd., Singapore Telecommunications Ltd. and Pacific Century CyberWorks Ltd. held separate talks over the weekend that may lead to a three-way merger of two of Asia's biggest phone companies and the region's biggest Internet firm outside Japan.
HKT said its advisers met their counterparts from CyberWorks on Saturday, though a firm proposal wasn't made. SingTel denied a report in the Hong Kong Standard that it's poised to withdraw from its talks with HKT.
``The Hong Kong Standard report is not true,' said Ivan Tan, a SingTel spokesman. ``The talks are still continuing.'
A three-way combination would create a company with access to millions of customers in two of Asia's biggest telephone markets. The new entity would control 60 percent of the phone market for multinational businesses in Asia outside of Japan and have a market capitalization of S$100 billion ($59 billion).
It also would probably expand to new markets such as Taiwan, Korea, Malaysia and Indonesia.
Company officials declined to comment on other reports in Hong Kong newspapers. The Hong Kong Economic Journal said an unnamed U.S. telecommunications firm hired Salomon Smith Barney Inc. as its adviser for a possible HKT bid. Apple Daily reported that CyberWorks may buy a 27 percent stake in HKT from its parent, Cable & Wireless Plc.
CyberWorks, established just nine months ago by Richard Li, the son of Hong Kong tycoon Li Ka-shing, joined the fray on Friday, saying it hired Warburg Dillon Read and Bank of China to evaluate a possible investment in HKT.
CyberWorks is building a high-speed Internet network in Asia. A stake in the combined company would give it the ability to deliver electronic commerce and multimedia services throughout Asia.
SingTel and HKT announced two weeks ago they were in talks to form a $26 billion company with a footprint in two of Asia's biggest telephone markets. SingTel presented a detailed proposal for a merger with HTK Saturday that involves both cash and stock, a banker close to the talks said.
HKT shares will resume trading Monday. The stock was suspended Friday after surging 23 percent to HK$21.65, the biggest one-day gain in at least a decade.