China Mobile squares off with US$1 billion offer for HKBN to fend off I Squared Capital
China Mobile has received undertakings from Canada Pension Plan Investment Board and US private equity firm TPG, which hold a combined 25 per cent stake
China Mobile has made a takeover offer for HKBN for as much as HK$7.8 billion (US$1 billion), joining a bidding war with US private equity firm I Squared Capital for one of Hong Kong’s biggest broadband service providers. The stock surged on trading resumption.
The world’s largest mobile-phone carrier by subscribers offered HK$5.23 per share for the company’s underlying shares, according to a Hong Kong stock exchange filing, or 7.6 per cent higher than its last-traded price. I Squared Capital made a non-binding offer to buy HKBN for an undisclosed amount earlier on the same day.
China Mobile said it has received irrevocable undertakings from two of HKBN’s biggest shareholders Canada Pension Plan Investment Board (CPPIB) and US private equity firm TPG, which own around 25 per cent of HKBN “in favour of the offerer”, according to its filing late Monday.
CPPIB has a 13.9 per cent of HKBN while TPG owns 11.1 per cent stake in HKBN and South Korean private equity firm MBK Partners holds an 11.1 per cent stake, excluding convertible instruments, according to HKBN’s latest annual report. Singapore sovereign wealth fund GIC Private has a 7 per cent stake.
China Mobile is offering HK$5.23 for each of HKBN’s 1.31 billion outstanding shares for a total of HK$6.86 billion. It will also pay the same price for other unvested share units and vendor loan notes, which could raise the takeover amount by another HK$937.7 million.
