Bidders circle as Hutchison offers HGC for sale

Bidders circle as Hutchison offers HGC for sale

Private equity companies are competing with Chinese and US state-backed institutions to buy Hutchison Global Communications (HGC) from Li Ka-shing’s Hutchison Telecommunications Hong Kong.

According to Hong Kong media overnight, the front runners to take over the fixed-line and global carrier include TPG Capital and MBK Partners, after earlier bids from Hong Kong Broadband Network (HKBN) and SmarTone were withdrawn.

In late 2016 TPG and MBK bought Wharf T&T, now WTT, the second largest enterprise telecoms operator in Hong Kong, for a reported $1.2 billion.

HGC refused to comment to Capacity on the reports. “Yes, we have no comment. Thanks,” said an executive in response to an email. HGC has close relationships with Chinese and other south-east Asian operators and over-the-top providers. 

“Sorry no comment, thanks,” NiQ Lai, chief operating officer of HKBN, told Capacity. It and SmarTone dropped out “because of concerns over valuations and potential anti-trust regulatory hurdles”, said Reuters, citing anonymous sources. 

Reuters says that TPG Capital and MBK Partners are in one bidding consortium, competing against investment manager I Squared Capital Advisors, a five-year-old New York-based operation that focuses “on energy, utilities and transport in North America, Europe and select high growth economies”.

According to Infrastructure Investor, I Squared Capital raised a $3 billion infrastructure investment fund in 2015, and later in the year added $200 million from the US government’s Overseas Private Investment Corporation.

According to Reuters, another organisation considering a bid is Hong Kong-based CITIC Telecom International Holding. CITIC is 58% owned by the state-owned CITIC Group in Beijing. Reuters says CITIC “is expected to take a final decision [on whether or not to bid for HGC] by end of this week”, citing unnamed sources. In 2013 it bought CTM, the operator in China's special administrative region of Macau, from Cable & Wireless. 

TPG, based in California, invests in Airbnb, Spotify, Uber and other technology companies, and was an investor in Asia Netcom, which became Pacnet and was taken over by Telstra. MBK Partners invests in China Network Systems in Taiwan.

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