HONG KONG (Reuters) – Hong Kong telecommunications company PCCW (0008.HK) said on Sunday it has ended the sale of a stake in its new HKT unit, citing the market upheaval.
The auction for HKT, a business estimated to be worth more than $3 billion which had attracted several private equity bidders, is the second major Asian deal pulled in the last week due to the global market plunge.
China’s Huawei Technologies pulled its auction for a stake in its mobile handset division, which was said to be worth more than $3.5 billion and also attracted private equity giants.
PCCW said it will continue with the overall reorganisation of the company.
“The recent market downturn has significantly impacted the offers received,” the company said in a statement about the HKT sale.
Private equity firms Apax Partners, Bain Capital, Carlyle Group, and Providence Equity Partners were among those that took part in the auction, sources familiar with the matter had previously told Reuters.
PCCW, Hong Kong’s former monopoly fixed-line carrier, said in May it planned to fold its core media and telecoms businesses into a separate firm called HKT and sell 45 percent of the new company. It hired UBS to run the auction. At the time, PCCW shares had dropped 90 percent since 2000.
HKT consists of three PCCW businesses: information technology, telecommunications, and media.
PCCW hopes to spin off HKT into a publicly traded division. PCCW’s broadband TV arm, called nowTV, is the world’s largest provider of IPTV. The company also controls a property unit. The hope was to get a minority stake investor in the division before it went public.
The deal was complicated from the beginning and involved the Chinese government and PCCW chairman Richard Li, the younger son of Hong Kong’s richest man, Li Ka-shing.
Chinese government-run China Netcom (0906.HK) owns nearly 20 percent of PCCW.
(Reporting by Michael Flaherty; Editing by Greg Mahlich)