Good to see that the courts still have clout in HK.. every now and then a legal event happens in HK that allows you to have faith in the system.. this is one of those times….
TeleGeography reports…
Li abandons PCCW buyout bid after court decision
The Court of Appeal in Hong Kong has unanimously backed the Securities and Futures Commission (SFC) in blocking the proposed buyout of PCCW Group by its chairman Richard Li and fellow shareholder China Unicom.
Bloomberg reports that Li immediately abandoned the USD2.1 billion share offer, which was due to expire today, prompting a 14% decline in the telco’s shares to HKD3.54 this morning, the stock’s biggest drop in eight years.
The verdict also prevents Li from launching another bid to take the company private for twelve months. The SFC sought to block the buyout after claims that some minority shareholders were improperly influenced to vote in favour of the HKD4.50 per share deal on 4 February.
More than 800 people became registered as PCCW shareholders shortly before the ballot after some investors divided their holdings and distributed them to hundreds of agents at Fortis Insurance (Asia) Co, a company previously owned by Li, according to the regulator.
The Court of Appeal’s ruling overturned a decision of the High Court on 6 April, which had green-lighted the transaction on the basis that ‘share splitting’ was legal. Citigroup analysts have downgraded PCCW’s stock to ‘sell’ from ‘hold’, while ratings agency Standard & Poor’s revised its outlook on the company to ‘negative.’ Before Li’s privatisation offer was announced in October 2008, PCCW shares sunk to a low of HKD2.45, following a failed attempt to spin off and sell its core assets.
