Friday, June 23, 2006

More people come in to the PCCW deal

Among the buyers of PCCW's assets, it became more crowded with three funds coming in, Ashmore Investment Management, Spinnaker Capital and Clearwater Capital Partners.

This is the most interesting deal process I have seen: more and more bidders(both small and big) , and higher and higher willing-to-be-exposed price. Are the assets too good to be omitted? Or people are just too optimistics? Or Richard Li is so friendly with everyone that his asset are a must-see?

The three funds, according to their websites, are expertised in investing in debt, especially in distressed debt(one of Amy's expertised area, too). Coincidently, the three are jointly bidding for undersea cable carrier Asia Netcom, which is exactly belonged to the category "distressed debt", from China Netcom and its Beijing parent. It is said that the three will give Asia Netcom three years before a final solution. If the three also bought PCCW's alive assets, would three years too long?

Among PCCW's assets, the fastest growth comes from Now Broadband TV. It certainly beated other cable operators in terms of user number, and reported a good result in the PCCW's annual report 2005. I would call the service "alive asset", which will not be the right investment category for the three funds.(So why are they here?)

So now three groups, Macquarie, Newbridge and the three-fund consortium, are in the queue. Any further one coming into this fake game?

Big bet today(just for my readers):

If I were the banker, I will approach Mr. Rupert Murdoch, who just sold 20 percent stake of Hong Kong-based Pheniox TV to China Mobile, suggesting him to buy the Now broadband TV. It will be a good choice for the Australian tycoon to buy the opportunity in the growing cable TV market in Hong Kong, and thus opening the market in China as a result. Plus, he has the cash now from China Mobile.

Big belief today:
China Netcom will never allow any foreign companies buying the whole PCCW telecom network. In the political thinking, it must be in this way. So the choices remain with China Netcom: one is to buy PCCW itself in a decent way(isn't that many bankers planning to advise China Netcom) , or the other is to refuse and never cooperate with anyone.

Interesting findings today:

Lehman's relations

Rob Petty, the managing partner of Clearwater Capital Partners LLC, based in New York, once worked with Lehman Brothers, the advisor to PCCW on the deal, for 12 years. Lehman also worked with Ashmore on raising the funds. Hmmm, financial world is always small.....

1 comment:

Cole said...


I am a Canadian who has been investing directly in HK stocks through HSBC Canada for the past three years. I was looking on the web for a chat group or blog discussing the HK market and came across your web site. (There is virtually no-one out there in cyberland discussing relatively small Hong Kong companies in English.)

My strategy is more or less "value investing" and I think I have found a number of opportunities in the HK market to diversify my Canadian portfolio.

Do you write a column in Engish?
Can you direct me to people or sites that could be of interest to me?