Hong Kong telco PCCW issued a statement saying it is ending efforts to sell as much as a 45 percent stake in a newly-created telecommunications and media subsidiary because "the recent market downturn has significantly impacted the offers received." Several private equity bidders were thought to have been on the short lists after submitting bids for the unit, HTK Group Holdings (HTKGH).
The Wall Street Journal further reports that banks would not offer the bidders enough flexibility in the financing arrangements to increase their initial offers. PCCW's pull-back comes just days after Huawei Technologies withdrew its mobile handset unit from the auction process, citing unfavorable market conditions. The current environment also may not bode well for Nortel Network's reported desire to sell its Metro Ethernet unit.
In addition, pending carrier deals, such as Verizon Communications's acquisition of Alltel and the private equity buyout of Bell Canada Enterprises, have been shaken by the recent downturn.
PCCW in August shortlisted six bidders for HTKGH
PCCW said this year it wants to grow internationally