Richard Li Tzar-kai, chairman and major shareholder of PCCW, and his partner China Netcom's bid to privatize Hong Kong's PCCW is in doubt after two advisory firms recommended that PCCW's institutional investors reject the chairman's offer. PCCW minority shareholders are set to meet on Dec. 30 to vote on the deal, and the South China Morning Post has reported that Li does not plan to increase his offer of about HK$14.9 billion (around $2 billion).
Previously, PCCW's primary financial advisor had recommended that minority shareholders accept the offer, though the deal already had collected much criticism from people who said PCCW should remain a public firm. The bidding partners are trying to acquire the 52 percent of PCCW that they do not already own, an attempt which comes shortly after PCCW unsuccessfully tried to sell a stake in a telecom-media spin-off company.
If the deal fails, it would be the second such telco privatization this month to collapse, after the Bell Canada Enterprises deal.
- China Knowledge has this coverage
PCCW's privatization was proceeding last month despite criticism
Economic downturn hurt PCCW's attempt at a spin-off