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PCCW strengthens C&W HKT position

PCCW strengthens C&W HKT position

Pacific Century CyberWorks (PCCW), Hong Kong's emerging Internet powerhouse, is armed with reinforcements to takeover Hong Kong's incumbent telecom carrier Cable & Wireless HKT (C&W HKT), while a possible three-way dealinvolving original suitor Singapore Telecommunications (SingTel) reportedly has been scuttled.

PCCW's well-received new placement of its stock on Monday yielded the company approximately $US1 billion that may, it said, be used in a deal to acquire C&W HKT, Hong Kong's largest telecom carrier.

Meanwhile, C&W HKT's original suitor, SingTel, apparently will not be part of a joint purchase deal with PCCW that had been reported in the works last week. SingTel announced two weeks ago that it was in discussions with C&W HKT's parent, UK-based Cable & Wireless PLC, over a possible merger between the two Asian telecom providers.

A PCCW statement released early last week confirmed that the company has approached Cable & Wireless to propose a merger with C&W HKT.

In its statement on the proposed merger, PCCW stated that the deal "would create an undisputed Asian Internet powerhouse, and eventuallya truly global leader with roots inHong Kong".

According to PCCW's statement, a merger could create "revenue synergies" and allow PCCW to reposition C&W HKT as a broadband Internet access provider.

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