HONG KONG (Reuters) – PCCW’s (0008.HK) controlling shareholders will no longer pursue a buyout and will move on to focus on growth in the company’s core business and expanding into new areas, a PCCW executive said on Friday.
“There is no privatisation. That’s all finished. We’re moving on,” Group Managing Director Alex Arena said on Friday at the company’s annual shareholders’ meeting.
The Court of Appeal in April blocked a $2.2 billion bid by Chairman Richard Li through his Pacific Century Regional Developments, controlling shareholder of PCCW, to take the company private.
However PCRD said in May it had decided to appeal.
“We only filed a notice to preserve our right to appeal. But whether we actually appeal (with the Court of Final Appeal) is something we will let you know about,” independent director and AGM facilitator Aman Mehta added.
But based on Hong Kong’s securities laws, Li’s group may not attempt another buyout within 12 months after the court’s rejection of the bid.
The Court of Appeal case centred on an appeal by the Securities and Futures Commission against an earlier High Court verdict allowing the buyout to proceed amid allegations of vote-rigging.
Addressing shareholder concern about the cost of the appeal if it is pursued further, Arena said counsel fees incurred in the courts have so far reached less than HK$6 million.
“For a company that has a revenue of over HK$25 billion, that’s a tiny amount in the grand scheme of things,” he said.
Shareholders had also demanded to know whether there was a possibility of the company being closed down, after Li’s father, Hong Kong’s richest tycoon Li Ka Shing, said companies might be better off shut down if they could not be taken private when appropriate.
“There is no intention of closing down the company as a result of the failure to privatise it. Privatisation having lapsed has no bearing on the structure and future operation of the company,” Mehta said.
“The operating conditions of the company are going reasonably well. Remember, there are 15,000 dedicated employees whose job is to make this company bigger, Arena added. (Reporting by Nerilyn Tenorio; Editing by David Holmes)