New Group Bids For Chairman's Stake In PCCW

HONG KONG (Dow Jones) -- Shares of Hong Kong fixed-line telecom company PCCW and its cellular services unit Sunday Communications Ltd. were suspended from trading Monday, following reports a new group has stepped forward with an offer to buy chairman Richard Li's stake in the company.

A group of tycoons led by Francis Leung Pak-are trying to buy the 26% owned by Li at HK$6 per share (77 cents), according to reports in the English-language Hong Kong Standard Newspaper.

Richard Li acquired Hong Kong's dominant fixed line provider Hong Kong Telecom from Britain's Cable & Wireless Plc in 2000 and subsequently renamed the company Pacific Century Cyberworks.

Reports of the latest takeover offer come at a time when Australia's Macquarie Bank Ltd.and U.S. private equity firm TPG-Newbridge are both bidding for PCCW's core telecommunications and media assets.

Local media reported the PCCW board is meeting Monday, but there was no formal comment from management on the latest reported bid.

The most recent offer values Richard Li's stake at HK$10.5 billion and represents a 9.1% premium to PCCW's closing price of HK$5.5 Friday, according to newspaper reports.

The Macquarie bid is valued at $7.3 billion, while TPG-Newbridge's bid is believed to be slightly higher.

Analysts say the Leung-led is sound because it is unlikely to face opposition from state-owned China Netcom Group, which holds a 20% stake in PCCW.

The mainland telecom had earlier expressed displeasure over any changes in the shareholding structure of PCCW. Many analysts believe Beijing's approval is key to success of any takeover bid.

Both Macquarie and TPG-Newbridge have sought to win China's approval by saying China Netcom could have up to 50% ownership in any takeover.

(END) Dow Jones Newswires"

Posted to the site on 10th July 2006