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Newbridge eyes 25% of Li's venture

(China Daily HK Edition)
Updated: 2006-01-27 16:54

A private equity group led by Newbridge Capital is offering US$125 million for a 25 per cent stake in Hong Kong tycoon Richard Li's Pacific Century Regional Developments (PCRD), the companies said yesterday.

The deal would give Newbridge access to PCRD's main assets, which include a 23 per cent stake in Hong Kong fixed-line phone company PCCW Ltd and 46 per cent of Hong Kong-listed Pacific Century Insurance Ltd.

Newbridge, the Asia-focused arm of US buyout firm Texas Pacific Group, is offering S$0.27 per share for the minority shares in Singapore-listed PCRD, a premium of 17.4 per cent to the stock's last trading price of S$0.23.

"The largest component of the asset value of PCRD is its stake in PCCW, and we think they're attractive assets with good market positions," Newbridge Managing Director Tim Dattels said in a telephone interview from San Francisco.

If the deal is completed, Pacific Century Regional Developments would be privatized and apply to be delisted from the Singapore exchange, Newbridge said in a statement.

"PCCW has a strong business. It's an innovator. It's got a world-leading product in Now TV and a strong and growing business on the Chinese mainland," Dattels said.

Now TV, PCCW's Internet protocol-based pay TV service in Hong Kong, is the largest of its kind in the world, crossing the 500,000 subscriber mark in November.

Li's holding company, Pacific Century Group Holdings Ltd, would maintain its 75 per cent stake in the company. It said it would support the deal if minority shareholders accept the proposal.

Asked if Newbridge planned to lift its stake in any of the group assets, Dattels said: "Right now we're just focusing on the PCRD scheme of arrangement that's been announced."

Newbridge, joined in its PCRD investment by sister firm TPG-Axon Capital, was founded in 1994 by Texas Pacific Group and Blum Capital Partners and manages more than US$3.2 billion, according to its website.

Newbridge holds stakes in top Chinese PC maker Lenovo Group, and a controlling stake in Shenzhen Development Bank, the first mainland lender to be controlled by a foreign investor. It also holds stakes in telecoms carriers including South Korea's hanarotelecom.

PCCW Chairman Richard Li, a high-profile figure during the dot-com boom when his then-Internet firm paid US$28.5 billion in 2000 to buy Hong Kong's former phone monopoly from Cable & Wireless, has been an avid dealmaker of late.

A year ago, PCCW sold a 20 per cent stake to China Netcom Group for US$1 billion in a deal aimed at giving the Hong Kong carrier access to the fast-growing mainland. Also last year, PCCW returned to the cellular business in a US$249 million deal to take over small local carrier Sunday Communications Ltd.