PCCW sets date for buy-out vote

08 Dec 2008
00:00

PCCW has set a date for the shareholder vote on China Netcom and Richard Li's proposal to buy out and take private the company - and has cleared Li to vote on the transaction, almost guaranteeing the deal will go ahead.

Shareholders will assemble on December 30 to cast their votes on the proposed HK$15.9 billion ($2 billion) deal. This translates to an offer of $0.54 per share - a 53% premium on the stock's last active trading price.

PCCW stock was suspended from trading in October, following the announcement of the offer. It was last trading at $0.35.

Richard Li and China Netcom are PCCW's two largest shareholders, and together control a majority stake in the company.

According to Reuters, PCCW expects the deal to significantly increase its debt, from $3.1 billion to $5 billion.

PCCW in October scrapped plans to sell a stake in its Hongkong Telecom subsidiary, facing a dearth of attractive offers amidst the economic downturn. The company saw bids as low as $450 million, compared to up to $2.5 billion two months ago.

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