(Associated Press via NewsEdge) US private equity firm TPG-Newbridge is planning to buy Hong Kong phone operator PCCW's assets by offering its reluctant Chinese shareholder up to 50% of the deal, news reports said.
Newbridge plans to use the offer to woo PCCW's 20% stakeholder China Netcom, seen as a major hurdle in the proposed deal because it voiced objections to foreign control of the phone company, a person familiar with the situation who spoke on condition of anonymity told Dow Jones Newswires.
Newbridge is vying for PCCW's telecommunications and media assets with Australia 's Macquarie Bank, which has also offered China Netcom a stake of up to 50% in the deal, Dow Jones reported, quoting another unidentified person familiar with the situation.
The Macquarie bid is valued at $7.3 billion, while the Newbridge bid is valued slightly higher, the report said.
The person was not able to provide details about how the deal would be structured, it said.
State-run China Network Communications, the parent of Hong Kong-listed China Netcom Group, earlier said it wants no major changes at PCCW. It bought into the Hong Kong company for $1 billion in March 2005 as a strategic investor.
PCCW is run by Richard Li, the younger son of Hong Kong 's wealthiest man, Li Ka-shing. In 2000, Li bought Hong Kong fixed-line operator Cable & Wireless HKT, formerly known as Hong Kong Telecom, in a $28 billion cash and stock deal.
The proposed sale of PCCW's assets would leave PCCW as a smaller company mainly with real estate assets.
c 2006 The Associated Press
c 2006 Dialog, a Thomson business. All rights reserved