PCCW: Judge calls buyout offer "outrageous"

A judge reviewing the PCCW private buyout has called a compensation plan for its chairman and a co-bidder "outrageous," Bloomberg reports.

The offer of $0.58 a share by PCCW Chairman Richard Li and China United Network Communications Group is being called a "rock bottom" price, as the bidders would get a special dividend from PCCW exceeding the value of their offer following the takeover, a Hong Kong appeals judge told a PCCW lawyer.

Hong Kong's Securities and Futures Commission is trying to block the purchase, contending that free PCCW stock was given to hundreds of investors to boost support for the bid. Currently a panel of three judges is reviewing an April 6 High Court ruling that approved the multi-billion dollar buyout.

More than 1,400 PCCW shareholders voted for the buyout on a Feb. 4 vote, while more than 850 voted against it. However, more than 800 people become registered shareholders shortly before the vote due to the fact that some investors divided their holdings and distributed them to others, including hundreds of agents at Fortis Insurance (Asia) Co.

The special dividend to be provided to Li and the co-bidder runs to the billions of dollars.

For more:
- The Bloomberg story.

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