Hong Kong’s HKBN to get US$1 billion buyout offer from HGC, sources say

HONG Kong telecommunications provider HKBN has received a takeover offer from HGC Global Communications that could value the company at more than US$1 billion, according to people familiar with the matter.

HGC, owned by private equity firm I Squared Capital, has lodged an offer for the Hong Kong-listed company, said the people, who asked not to be identified as the information is private.

Shares of HKBN were up about 12 per cent when trading was halted on Tuesday (Feb 28), without giving a reason for the suspension. They had jumped as much as 13 per cent, their biggest advance in seven weeks, after the Bloomberg News report. The stock is still down 44 per cent in the past 12 months, giving the company a market value of about HK$7.2 billion (S$1,236.8 million).

The new offer comes after a sale was put on hold last year as potential buyers expressed concerns over valuation amid market volatility. KKR . and PAG were among suitors considering bids at the time, Bloomberg News has reported.

The asset could also draw interest from Chinese companies or funds backed by the government as the country steps up scrutiny of sensitive technology-related assets and tightens oversight over data security, the people said.

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 major shareholders include buyout firms TPG and MBK Partners as well as Singapore’s GIC.

HGC is a fixed-line operator that owns infrastructure in Hong Kong and overseas, providing services including full-fledged telecom, data centre and broadband, according to its website. The company was founded in 1995 and was formerly known as Hutchison Global Communications. I Squared Capital bought the company in 2017 for HK$14.5 billion.

Deliberations are ongoing and might not lead to a transaction, the people said. Representatives for HGC, HKBN, MBK and TPG declined to comment, while a representative for I Squared didn’t immediately respond to requests for comment. BLOOMBERG