Yahoo Finance IDG Considers Offer for Hong Kong Broadband Firm HKBN
(Bloomberg) -- China-focused investment firm IDG Capital is exploring a buyout of HKBN Ltd., people with knowledge of the situation said, as the owners of the Hong Kong broadband service provider weigh their options for the company.
Most Read from Bloomberg
Wall Street Billionaires Are Rushing to Back Trump, Verdict Be Damned
Donald Trump Becomes First Former US President Guilty of Crimes
Fed’s Favored Inflation Gauge Cools, Spending Unexpectedly Drops
IDG has sounded out financing plans for a potential offer for the Hong Kong-listed firm, one of the people said. HKBN has also drawn preliminary interest from Chinese companies including China Mobile Ltd., the people said.
HKBN’s shares surged as much as 14% in Hong Kong, the most since Nov. 3, while the benchmark Hang Seng Index fell 0.8%
HKBN’s shareholders include private equity firms MBK Partners and TPG Inc., which have revived a strategic review with the aim of reducing their holdings, Bloomberg News reported in March. Considerations include going private, bringing in new investors or raising cash through some of HKBN’s assets, people familiar with the matter have said.
Read More: HKBN’s Owners Said to Revive Deal Options for Broadband Firm
Deliberations are ongoing and may not result in a deal, the people said, asking not to be identified discussing confidential information.
A representative for IDG said the firm was not involved and unaware of the situation. HKBN and China Mobile didn’t respond to requests seeking comment.
IDG was founded in 1993 and its investment strategies include venture, growth and buyout, according to its website.
HKBN has attracted interest in the past from private equity firms including I Squared Capital, but disagreements over factors such as valuation meant a deal was never reached.
Read More: HKBN Is Said to Draw PAG Interest After I Squared Approach
HKBN offers internet services, as well as other telecom, data center and Wi-Fi services. Its major shareholders also include Canada Pension Plan Investment Board and Singapore’s GIC Pte.
HKBN’s revenue for the six months through February declined 13% from a year earlier to HK$5.8 billion ($742 million), a drop the company blamed on a slow economic recovery, rising interest rates and a trend of customers postponing handset upgrades, according to its interim report on May 13. Net profit slid 93% to HK$1.5 million and net current liabilities stood at HK$273 million.
Prior to Friday afternoon’s surge, HKBN’s shares had fallen 52% in the past 12 months, leaving the company with a market value of HK$3.1 billion, far from the 2020 high of HK$20 billion. That figure rose to HK$3.4 billion Friday.
--With assistance from Shirley Zhao.
(Updates with move in share price in third and final paragraphs.)
Most Read from Bloomberg Businessweek
Disney Is Banking On Sequels to Help Get Pixar Back on Track
US Malls Avoid Death Spiral With Help of Japanese Video Arcades
The Secret Ozempic Recipe Behind Novo’s Race to Boost Supplies
Why Dave & Buster’s Is Transforming Its Arcades Into Casinos
©2024 Bloomberg L.P.
