Top Financial News
Mon, 28 Feb 2000, 12:17am EST
Cable & Wireless HKT Says It May Reach Agreement With Cyberworks in 48 Hrs By Biddy Chan
HKT Says CyberWorks May Strike Pact Within 48 Hours (Update3)
(Adds in 5th paragraph NYT report that News Corp. to invest $1 Bln in SingTel; adds share prices in final paragraph.)
Hong Kong, Feb. 28 (Bloomberg) -- Cable & Wireless HKT Ltd. said Pacific Century CyberWorks Ltd. may reach an agreement with its U.K.-based parent within 48 hours on a bid for Hong Kong's dominant phone company.
CyberWorks was suspended from trade today after saying it made an offer Friday to the board of Cable & Wireless Plc, which owns 54 percent of HKT. It didn't further describe the offer, valued at about $37 billion by the Asian Wall Street Journal.
HKT, also suspended in Hong Kong today, said in a statement that CyberWorks and C&W Plc may agree on a possible offer to shareholders ``within the next 48 hours.'' It said an announcement by CyberWorks about the offer ``may be imminent.''
CyberWorks, an Internet investment company run by Richard Li, the son of Hong Kong tycoon Li Ka-shing, said two weeks ago it was bidding for HKT, rivaling a previously announced bid by Singapore Telecommunications Ltd.
SingTel declined to comment today. The New York Times cited executives close to the company today as saying News Corp. of Australia agreed to invest $1 billion in SingTel to help sweeten its offer for HKT. News Corp. plans to form an Internet, television and mobile telephone venture with SingTel as part of the investment, the Times reported.
CyberWorks is holding a news conference in Hong Kong later today to discuss a separate pact with Legend Holdings Ltd. It may also respond to questions about the HKT bid at the news conference.
The Journal said CyberWorks presented two proposals to C&W Plc. In one scenario, CyberWorks would give the U.K. company 0.7 CyberWorks shares and about HK$7 in cash for each HKT share, valuing HKT at HK$270 billion ($35.7 billion). A second all-stock offer was worth about 10 percent more, valuing HKT at about $38.5 billion, the paper said.
The first offer ``makes sense,'' because both HKT and CyberWorks are now trading far higher than their net asset value, said Richard Ferguson, an analyst at Nomura Securities in Hong Kong. HKT shares, last quoted at HK$25.95, are actually worth just HK$10 to HK$12, he said.
A stake in HKT would give CyberWorks a channel through which it could deliver a range of electronic commerce and multimedia services to customers throughout Asia. CyberWorks was established less than a year ago by Richard Li and now has a market value higher than Amazon.com.
HKT was last quoted at HK$25.95. CyberWorks was last traded at HK$22.15. SingTel rose 3.36 percent to S$2.77.