Hong Kong Telco HKBN’s sale stalls again on valuation, sources say
THE sale of HKBN has stalled again as the Hong Kong broadband provider’s owners couldn’t agree with prospective buyers on a valuation, according to people familiar with the matter.
The Hong Kong-listed company in March confirmed private equity firm I Squared Capital had expressed interest in the company that could involve a possible offer, following an earlier Bloomberg News report that the buyout firm was considering a takeover at a valuation of more than US$1 billion.
I Squared had engaged with banks to help advise and finance a potential offer, the people said, asking not to be identified as the information is confidential. Discussions between HKBN and the potential suitors are on hold for now, as they haven’t been able to bridge the differences over valuation, the people said. Attempts by the sellers to find other interested candidates have not led to any additional formal offers, the people said.
No final decision has been made, discussions may resume and HKBN could attract other suitors in the future, the people said.
The halt comes almost a year after sale talks broke down on similar grounds, with potential buyers citing valuation and market volatility among their chief concerns, Bloomberg News reported.
HKBN offers broadband Internet services to residential and corporate customers in the city. It also provides other enterprise telecom solutions, runs data centres and offers Wi-Fi connectivity. Its shareholders include buyout firms TPG and MBK Partners as well as Singapore’s GIC. The board of HKBN in March received a preliminary non-binding letter from I Squared stating its interest in pursuing a transaction involving a potential offer, through HGC Global Communications.
Shares of HKBN have declined about 2 per cent this year, valuing the broadband provider at around US$840 million.
Representatives for HKBN, I Squared and TPG declined to comment, while MBK Partners didn’t immediately respond to a request for comment. BLOOMBERG
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