Stalled HKBN bid gives owners jitters

Staff reporter

HKBN's (1310) major shareholders are eager to exit amid a stalled buyout process, and any future acquisition bid will likely be lower if the deal falls through, according to Sing Tao Daily.

China Mobile's (0941) acquisition proposal for the local broadband service provider has remained in limbo with no approval given by mainland regulators since the state-owned telecom giant's bid in December, The Standard's sister newspaper reported.

The other potential buyer, I Squared Capital, which expressed its interest in purchasing HKBN at a higher price, has not yet submitted any offer, Its hesitation could be tied to financial considerations and long-term planning, it said.

A fund under I Squared Capital, which acquired HKBN's rival HGC Global Communications in 2017, is approaching maturity with underwhelming returns and this may pressure the fund to pursue new investments such as HKBN, the report said.

If China Mobile's bid does not get cleared by the mainland regulators and results in a withdrawal of the offer, HKBN's share price is likely to decline sharply, it said.

China Mobile in December offered to buy HKBN for a total of HK$6.86 billion, or HK$5.23 per share. It said at the time that shareholders with a nearly 25 percent stake in HKBN had given an "irrevocable undertaking" in favor of its offer.