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HONG KONG, Feb 29, 2000 (AP Worldstream via COMTEX) -- An Internet investmentcompany run by the son of a top Hong Kong tycoon agreed Tuesday to buy theterritory's big phone company, after wiping out a bid from rival financialcenter Singapore.
Tue Feb 29 00:19:00 EST 2000    

        Pacific Century CyberWorks Ltd., controlled by billionaire Li Ka-shing's son
Richard Li, said it had reached a deal to purchase Cable and Wireless HKT from
its majority shareholder, Cable and Wireless PLC of Britain.

The merged company, to be called Pacific Century CyberWorks HKT, will be worth
about U.S. dlrs 70 billion to dlrs 80 billion on the stock market, said Alex
Arena, the group managing director.

Pacific Century CyberWorks did not immediately release terms of the deal, saying
they need to be finalized.

Singapore Telecommunications Ltd. had never announced the size of its earlier
bid. SingTel pulled out of the running Tuesday morning with a statement touting
the ``solidity and stability'' of its failed attempt to create a regional
telecoms powerhouse worth some U.S. dlrs 60 billion.

The night before, SingTel had staged a dramatic effort to boost its earlier bid
by joining forces with media baron Rupert Murdoch's News Corp.

The deal announced Tuesday still needs approval by the board of Cable and
Wireless HKT, which is 54 percent held by its British parent.

The 33-year-old Li appeared jubilant early Tuesday as he stopped to chat briefly
with reporters on his way into the meeting with analysts. Li and his company
will hold some 37 percent of the merged group, Arena said afterward.

Arena said Cable and Wireless PLC will retain about 20 percent of the merged

group. Other stakeholders with smaller but significant shares include China
Telecom (Hong Kong) Ltd., CMGI Inc. and Intel Corp.

Li, whose startup Internet group has been on a buying binge, called the phone
company ``the best platform to develop Asia,'' though he would not be drawn on
any specific strategy.

Li said there were no plans to cut costs by laying off staff.

The battle for control of Cable and Wireless HKT began in January, when SingTel
said it was in negotiations that could merge the Hong Kong and Singapore phone

The news stirred talk of a more rapid opening of Asia's telecommunications
markets, many of them tightly controlled by regulations that have not permitted
the types of freewheeling takeovers that are reshaping the telecoms industries
in the United States and Europe.

Hong Kong and Singapore have two of the more liberalized markets, and analysts
said creating a regional group made some sense at a time when both are beginning
to face stiffer competition on their home turfs.

But Hong Kong and Singapore are traditionally fierce business rivals, and the
idea that Singapore could end up calling the shots at the local phone company
stirred considerable opposition here.

Pacific Century CyberWorks soon entered the picture, bringing the considerable
clout that the Li family wields in Hong Kong.

There has been much speculation -- none of it confirmed -- that Beijing
preferred to see the Hong Kong phone company remain under local control.

``It's got the influence of the Chinese government written all over it, '' said
Dwayne Taylor, an analyst at Robert Fleming Securities.

Amid signs a deal was drawing near, Pacific Century CyberWorks suspended its
shares from trading on the Hong Kong Stock Exchange on Friday. Cable and
Wireless HKT took its shares off the market on Monday and said a deal seemed

SingTel offered no explanation for its retreat from the deal.

It issued a statement, saying it ``wishes to announce that it has withdrawn from
discussions on a possible merger between SingTel and Cable and Wireless HKT

SingTel shares opened with a quick gain of 3 percent early Tuesday on the
Singapore stock market, with investors relieved that the company had not gotten
drawn into a bidding war.

Pacific Century CyberWorks and Cable and Wireless HKT were still off the market
when Hong Kong shares began trading Tuesday.

Copyright 1999 Associated Press, All rights reserved.

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