Two private equity groups submit bids for Hutchison fixed-line unit -sources (updated)
18/07/2017 07:26
(Adds interest from other bidders, details on Hutchison
business)
By Sumeet Chatterjee and Prakash Chakravarti
HONG KONG, July 18 (Reuters) - A consortium of private
equity firms TPG Capital Management LP TPG.UL and MBK
Partners, and investment manager I Squared Capital Advisors LLC
have put in separate bids for the fixed-line phone unit of Hong
Kong's richest man, Li Ka-Shing, said people involved in the
matter.
Hutchison Global Communications Ltd (HGC), a unit of
Hutchison Telecommunications Hong Kong Holdings Ltd 0215.HK ,
provides a range of fixed-line telecommunications services in
Hong Kong and overseas for corporate and residential users.
HGC, which had earnings before interest, tax, depreciation
and amortisation (EBITDA) of $161 million in 2016, is likely to
be valued at $1.2 billion to $1.5 billion, three people told
Reuters.
A final decision on the sale process is likely to be taken
by HGC as soon as next week, said the people, who requested
anonymity because the transaction details have not been released
publicly.
The HGC sale process had earlier drawn bidding interest from
Hong Kong broadband and telecoms service providers HKBN Ltd
1310.HK and SmarTone Telecommunications Holdings Ltd
0315.HK , said the people.
Both the companies have now decided to drop out of the race
to acquire HGC because of concerns over valuations and potential
anti-trust regulatory hurdles, two of the people said, declining
to give details.
Hong Kong-based CITIC Telecom International Holdings Ltd
1883.HK , however, is still weighing a bid for the HGC business
and is expected to take a final decision by end of this week,
they said.
Representatives for MBK, HGC and HKBN declined to comment.
TPG, I Squared Capital, SmarTone and CITIC Telecom did not
immediately respond to requests for comment.
MBK Partners has a long track record of investing in Asian
technology, media and telecommunications assets, including
Taiwanese network TV operator China Network Systems, cable
television network Gala TV and Japanese software maker Yayoi.
TPG has also invested in a wide range of telecom companies
in Asia, including telecommunications service provider Asia
Netcom, now known as Pacnet, and Japan Telecom, now known as
SoftBank Telecom.
HGC offers "wholesale services" to support mobile operators,
global carriers, multinational firms, internet content providers
and application service providers in Hong Kong, the Americas,
Europe, the Middle East and Africa, along with the rest of Asia.
It owns and runs an extensive optical-fibre network, coupled
with four cross-border routes integrated with three of mainland
China's tier-one telecoms operators and an international
network, according to its website.
(Reporting by Sumeet Chatterjee and Prakash Chakravarti;
Additional reporting by Kane Wu, Carol Zhong and Elzio Barreto;
Editing by Christopher Cushing)
((sumeet.chatterjee@thomsonreuters.com; +852-2847 2094; Reuters
Messaging: sumeet.chatterjee.thomsonreuters.com@reuters.net))
Keywords: HUTCHISON M&A/TELECOMS