The one-month bidding war surrounding the city's largest phone operator came to an end yesterday after its controlling shareholder Richard Li sold a 23-per-cent stake to a high-profile local banker.

The mega-deal, worth HK$9.16 billion (US$1.17 billion), valued PCCW at HK$6 (77 US cents) per share, an 8 per cent premium to its closing price of HK$5.55 (71 cents) on Friday.

Li retains a 3 per cent stake in the firm, in which China Netcom Group Corp, the mainland's second-largest fixed-line operator, spent US$1 billion last year for a 20-per-cent stake.

Francis Leung, who stepped down this year as chairman of Citigroup's Asia investment banking arm, beat two overseas rivals  Australia's Macquarie Bank and the Asian arm of US buyout firm Texas Pacific Group.

The two had previously offered US$7.3 billion and US$7.55 billion for the main phone and media assets of PCCW.

Dubbed "Godfather of Red Chips", Leung is credited with arranging the Hong Kong listing of some big mainland in the 1990s. Red chips are Hong Kong-listed mainland companies with at least a 20-per-cent stake held by the State or State-owned entities.

PCCW "has a unique position in Hong Kong's infrastructure network," Leung said at a press conference last night. "This is a long-term investment."

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