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Monday, 10 February, 2003, 06:37 GMT
Hong Kong tech firm mulls C&W bid
PCCW headquarters
PCCW is built around C&W's former Hong Kong unit
After a week of conflicting media reports, Hong Kong telecoms firm PCCW looks set to make a 2bn takeover offer for cash-strapped Cable & Wireless.

On Monday PCCW shares were suspended on the Hong Kong stock exchange pending an announcement about C&W and also Japan Telecom, Japan's third biggest fixed-line operator.

Last week, PCCW confused investors by telling the UK authorities that it was interested in C&W, while giving a contradictory story to Hong Kong regulators.

Now, PCCW chairman Richard Li has told the Sunday Times newspaper that, while he is not planning a hostile bid, the two firms are seeking ways to work together.

Over the weekend, Japanese newspaper Asahi Shimbun reported PCCW might make a bid for Japan Telecom, which is controlled by Britain's Vodafone.

Meant for each other?

According to PCCW, it approached C&W in December, but was rebuffed.

The two companies are closely linked.

PCCW, a highly fashionable firm during the internet boom of the 1990s, leapt into the big league when it bought C&W's Hong Kong Telecom subsidiary in 1999.

As a result, C&W owns 14% of PCCW.

But while C&W shareholders may see a deal as a way of resolving the firm's delicate financial condition, PCCW shareholders have reacted with dismay to the rumours of a deal.

The Hong Kong firm is saddled with debts of US$4.2bn, and has previously promised to focus on paying that off, rather than making fresh acquisitions.

See also:

21 Jan 03 | Business
10 Jan 03 | Business
26 Nov 02 | Business
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05 Sep 02 | Business
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