Abu Dhabi weighs bid for US$1 billion PCCW fibre unit stake

Abu Dhabi Investment Authority is considering bidding for a stake in PCCW’s fibre business, people familiar with the matter said, a move that would help the oil-rich emirate expand into Greater China.

Adia, as the Abu Dhabi wealth fund is known, is in discussions for a significant minority stake in PCCW’s fibre assets for about US$1 billion, the people said, asking not to be identified because the matter is private. 

Talks are ongoing and the parties could still decide against a transaction, the people said. Other bidders could still emerge, they added. Representatives for Adia and PCCW declined to comment.

PCCW, a telecommunications, media and technology conglomerate controlled by billionaire Richard Li, has been exploring selling a significant minority stake in its fibre business for about US$1 billion, Bloomberg News reported last week. The assets had drawn interest from Chinese investors as well as Middle Eastern funds, people familiar with the matter have said.

PCCW, which traces its roots to the Hong Kong Telephone formed in 1925, holds interests in businesses including telecommunications, media, IT solutions, property development and investment, its website shows. The company has been selling stakes across some of its operations, including its over-the-top video service Viu, its data centre business and IT services.

Shares of PCCW have risen about 13 per cent this year, giving the company a market value of about US$3.9 billion.

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Middle Eastern funds including Adia have spent tens of billions of dollars to diversify portfolios and help Gulf countries win geopolitical influence. Adia this year agreed to acquire a significant stake in Advent International’s Austrian power equipment maker Innio. The investment followed previous bets on German railcar lessor VTG AG and Emerson Electric’s Climate Technologies business. BLOOMBERG