Richard unwise business gamble

Hong Kong Pacific Century CyberWorks limited (PCCW Ltd., hereinafter referred to as: PCCW) and its President Richard (Richard Li) seems to be convinced that such a statement: Mercy easier than permitted. This is becoming more and more like an unwise to gambling.

PCCW is working with two foreign bidders '-Australia Macquarie Bank (Macquarie Bank Ltd.) And the United States private capital firms Texas Pacific Group led by a group-to conduct consultations to discuss the sale of the company's core assets. Irrespective of whether the master Richard sold the assets, he is likely to offend the PCCW's largest external shareholders China network communications group Corporation (China Network Communications Group, hereinafter referred to as: China Netcom) and behind of the Chinese Government. The Chinese State company holds PCCW 20% of the shares.

According to China Netcom's statement last week that said "not willing to see Hong Kong owned and managed by PCCW or its major assets to any change of status. "Two foreign bidders who have disclosed that they will not be affected by the Chinese Government strongly opposed the deal of interest.

Dissatisfied with the China Netcom is that they are in the incident was brought into this trap. China Netcom spokesman is taller, PCCW in June 19 published notice, disclosure of Macquarie Bank bid a thing, we did not receive formal notice.

PCCW stated that, in the public notice, the company's Board of Directors was held on 19 June to discuss the matter, then China Netcom in Board of Directors of three representatives also attended the meeting. PCCW's spokesman on this reluctance to make further comments.

But China Netcom's taller, PCCW notify its directors with formal contact with China Netcom's senior management to discuss the deal "is not a thing".

Insider, Macquarie Bank Board meeting a few weeks ago has already begun to PCCW due diligence. Insider, the Australia Bank has bid $ 7 billion, hopes to buy PCCW core telecommunications and media assets. Another insider, Texas Pacific and Asian subsidiary new bridge capital (Newbridge Capital) raised the price slightly higher than Macquarie Bank.

Beijing consulting firm BDA China Ltd. of Duncan • Clark (Duncan Clark), Richard tries to sell PCCW assets really unusual. He said that Richard may want to China Netcom "fait accompli", rather than by seeking approval in advance of complex red tape.

After notification of the China Netcom is facing a very complicated situation. In China, sell any State-owned assets, including CNC holders PCCW shares worth billions of dollars are needed to be seriously examined to ensure that a reasonable price.

In addition, the Chinese Government considers that the telecommunications industry is a strategic industry. This allows foreign holders even if it is such a high degree of autonomy of Chinese urban telephone network prospects are politically very sensitive.

Two competitive procurement are expressed, China Netcom shares can be increased to 50%, in order to avoid control submissively foreign. But China Netcom also has its own difficulties, one of the reasons is that the Chinese Government hopes to avoid having people on Chinese State-owned companies control such key service enterprises demonstrated. A China Netcom's insider says, they worry that the public's reaction.

China Netcom also on its own financial problems are worried. It is expected that the Chinese Government will later this year or in 2007 release 3G telecommunications service licence. This requires a significant investment and China Netcom energy building a new wireless network. BDA's Clark said, at this moment in the holdings of PCCW shares of assets may be seen as unnecessary expenditure of dispersed energies and.

From a legal sense, China Netcom by virtue of their own force does not prevent the transaction, PCCW in last week's announcement also noted, PCCW plans to sell the assets of the company, not the company itself. Two foreign bidders who are trying to discourage the sale of the assets of the concern that let project of China Netcom in their respective acquisitions.

At the same time, China Netcom's management must balance a number of sectors in China, to determine how to respond. Chinese State-owned assets supervision and Administration Commission (Assets Supervision and Administration Commission) control with the Government in China Netcom and other State-owned shares in the company. China Netcom also accept Ministry (Ministry of Information Industry). Involve such high-level audit decisions usually take a long time, because the Chinese Government departmental needs.

China Netcom last year's acquisition of PCCW's shares in internal aroused controversy. Insider, PCCW initial 50% of China Netcom's acquisition of its shares. But in the end, this proportion has shrunk to 20%.

The then Chief Executive of China Netcom listed subsidiaries long tiansuning (Edward Tian) last month, leaving the company, he served as Vice President of the subsidiary, and is a Director of the Board of Directors of PCCW. He is widely considered to be internal to the trading of China Netcom's key supporters.

Wednesday, Star Media Group (Star Group Limited), the spokesman said the company has worked with Macquarie Bank, participation in this competitive procurement matters held talks. Star media is Rupert, Rupert Murdoch, (Rupert Murdoch, and translation: Rupert Murdoch) of News Corporation (News Corp.) Its subsidiaries. Informed sources, the news

The group even if the stock, will not exceed 3%.