CHINA-FOCUSED investment firm IDG Capital is considering a buyout of HKBN, people with knowledge of the situation said, as the owners of the Hong Kong broadband service provider weigh their options for the company.
IDG has sounded out financing plans for a potential offer for the Hong Kong-listed telecommunications firm, one of the people said. HKBN has also drawn preliminary interest from Chinese companies including China Mobile, the people said.
HKBN’s shareholders include private equity firms MBK Partners and TPG, which have revived a strategic review with the aim of reducing their holding in the company, 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.
Deliberations are ongoing and may not result in a deal, the people said, asking not to be identified discussing confidential information.
HKBN, IDG, China Mobile did not immediately respond to requests seeking comment.
IDG Capital was founded in 1993 and its investment strategies include venture, growth and buyout, according to its website.
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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.
HKBN offers Internet services, as well as other telecom, data centre and Wi-Fi services. Its major shareholders also include Canada Pension Plan Investment Board and Singapore’s GIC.
HKBN’s revenue for the six months through February declined 13 per cent from a year earlier to HK$5.8 billion (S$1 billion), which 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 per cent to HK$1.5 million and net current liabilities stood at HK$273 million.
HKBN’s shares have slumped 52 per cent 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. BLOOMBERG
