Hutch (13) is Likely to Gain Green Light to A HK$30 billion Plus Exceptional
Apr 06, 2001 - 14:21:43 HKT
QuamResearch
Mr. K.S. Li's Hutchison (HKSE:0013) is probably one of the local companies with the largest amount of exceptional items appeared in its accounts. The 1999's over HK$109 billion exceptional gain arose from the sale of "orange" has made it the most profitable company in the world. Though such a legend may not happen twice, Hutch is likely to book a tremendous HK$30 billion plus exceptional gain from the sale of VoiceStream for the coming year.
According to Dow Jones Newswires, the Federal Communications Commission (FCC), the last obstacle to the DT-VoiceStream merger, is going to give a green light to the Deutsche Telekom's (DT) (NYSE:DT) dream of gaining control of a U.S. mobile-phone network, which would mark one of the largest foreign acquisitions in the U.S. telecommunications market. The completion of the deal will probably bring Hutch a HK$30 billion plus exceptional gain, boosting the company's bottom line for the coming year.
In July 2000, Germany-based DT suggested a cash-and-stock offer to merge with the U.S.'s No.6 cellular operator, VoiceStream Wireless Coparoration (VoiceStream) (NASDAQ:VSTR), effectively 18.4%-owned by Hutch, amid the tech fever. The German firm agreed to pay 3.2 of its shares plus US$30 for each VocieStream share which valued the deal at a mammoth US$50.7 billion when investors were still crazy for telcos.
However, oppositions have been stirred up in the U.S. as the current U.S. law allows Federal Communications Commission (FCC) to block foreign telcos with more than 25%-owned by local government (DT is 56%-owned by German government) from buying U.S. company if it thinks the deal is not in the public interest. This has been a concern for almost a year until now, when it is said will be cleared within few days.
Apart from the FCC barrier, the DT -VoiceStream deal is subject to another potential objection from VoiceStream as terms of the deal allow VoiceStream to walk away if DT's share price averages less than 33 euros over seven days in the 15 days before the deal closes. Though the share price of DT dropped significantly from its peak to yesterday's closing at US$23.55 (26.3 euros) per American depositary receipt and the deal is now cut half to US$26 billion, Hutch is unlikely to voice out as it is difficult to find another generous buyer to pay such a good price otherwise than DT. Moreover, it will be a tragedy for VoiceStream's share price if it fails to satisfy investors by pairing with DT.
For Hutch, the term of exceptional gains did not seem quite fit the company as it apparently turned non-recurrent gains into a recurrent nature. Over the past six years, exceptional gains ranging from HK$566 million to HK$109 billion have appeared in Hutch's income statement and it is very likely to book another HK$30 billion plus gain from as sale of VoiceStream, which Hutch bought at just HK$10 billion. Once again this exceptional gain will pop up Hutch's bottom line for the coming year.
OS Call.....angesagt !!!
Apr 06, 2001 - 14:21:43 HKT
QuamResearch
Mr. K.S. Li's Hutchison (HKSE:0013) is probably one of the local companies with the largest amount of exceptional items appeared in its accounts. The 1999's over HK$109 billion exceptional gain arose from the sale of "orange" has made it the most profitable company in the world. Though such a legend may not happen twice, Hutch is likely to book a tremendous HK$30 billion plus exceptional gain from the sale of VoiceStream for the coming year.
According to Dow Jones Newswires, the Federal Communications Commission (FCC), the last obstacle to the DT-VoiceStream merger, is going to give a green light to the Deutsche Telekom's (DT) (NYSE:DT) dream of gaining control of a U.S. mobile-phone network, which would mark one of the largest foreign acquisitions in the U.S. telecommunications market. The completion of the deal will probably bring Hutch a HK$30 billion plus exceptional gain, boosting the company's bottom line for the coming year.
In July 2000, Germany-based DT suggested a cash-and-stock offer to merge with the U.S.'s No.6 cellular operator, VoiceStream Wireless Coparoration (VoiceStream) (NASDAQ:VSTR), effectively 18.4%-owned by Hutch, amid the tech fever. The German firm agreed to pay 3.2 of its shares plus US$30 for each VocieStream share which valued the deal at a mammoth US$50.7 billion when investors were still crazy for telcos.
However, oppositions have been stirred up in the U.S. as the current U.S. law allows Federal Communications Commission (FCC) to block foreign telcos with more than 25%-owned by local government (DT is 56%-owned by German government) from buying U.S. company if it thinks the deal is not in the public interest. This has been a concern for almost a year until now, when it is said will be cleared within few days.
Apart from the FCC barrier, the DT -VoiceStream deal is subject to another potential objection from VoiceStream as terms of the deal allow VoiceStream to walk away if DT's share price averages less than 33 euros over seven days in the 15 days before the deal closes. Though the share price of DT dropped significantly from its peak to yesterday's closing at US$23.55 (26.3 euros) per American depositary receipt and the deal is now cut half to US$26 billion, Hutch is unlikely to voice out as it is difficult to find another generous buyer to pay such a good price otherwise than DT. Moreover, it will be a tragedy for VoiceStream's share price if it fails to satisfy investors by pairing with DT.
For Hutch, the term of exceptional gains did not seem quite fit the company as it apparently turned non-recurrent gains into a recurrent nature. Over the past six years, exceptional gains ranging from HK$566 million to HK$109 billion have appeared in Hutch's income statement and it is very likely to book another HK$30 billion plus gain from as sale of VoiceStream, which Hutch bought at just HK$10 billion. Once again this exceptional gain will pop up Hutch's bottom line for the coming year.
OS Call.....angesagt !!!
