Four sources claimed state-owned China Mobile Ltd (0941. HK) is considering a buyout of Hong Kong’s biggest telecoms business, HKBN Ltd (1310. HK), which may trigger a bidding battle for the $1 billion enterprise.
The people claimed China Mobile recently sent an RFP to a limited group of banks to advise on acquiring and privatizing the Hong Kong telecom operator, which provides internet and Wi-Fi management.
The secret sources said the Beijing-based company is still getting presentations from investment banks and has yet to make a formal offer.
After the Reuters report, HKBN shares rose 17% to HK$9 billion ($1.15 billion).
China Mobile and HKBN did not respond to requests for comment.
China Mobile’s interest in HKBN follows infrastructure investor I Squared Asia Advisors’ March non-binding letter of interest.
If the purchase went through, HKBN said the infrastructure investor would offer through its portfolio business HGC Global Communications, or one of its affiliates.
One of the persons and another with knowledge of the case claimed Hong Kong-based private equity company PAG might be a prospective suitor for HKBN.
PAG rejected the comment.
Separate sources told Reuters that HKBN’s senior owners, North Asia-focused private equity firm MBK Partners and buyout firm TPG Capital, will seek to exit in any purchase entirely.
MBK and TPG declined to comment.
One person stated China Mobile, the world’s largest mobile operator by subscribers, wants to buy HKBN, which provides internet connections to families and businesses, to expand in Hong Kong.
China Mobile will enter the Asian financial hub and be home to several global financial institutions if it acquires HKBN.
China Mobile, a major telecoms carrier in the world’s second-largest economy, has a limited international presence.
China Mobile entered Hong Kong in January 1997, months before the UK’s handover. Households and companies use their mobile and internet services.
In the year ending Aug. 31, 2022, HKBN’s adjusted net profit rose 20% to HK$905 million on a 1% revenue growth to HK$11.6 billion.
According to its 2022 annual report, it held 37% of Hong Kong’s enterprise broadband market and 34% of residential broadband.
HKBN bought WTT HK for $1.34 billion in 2018. That takeover largely exited TPG and MBK, WTT HK’s joint shareholders.
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