Telefónica Eyes PCCW Stake

HONG KONG/MADRID, November 8: Spanish telecommunications
giant Telefónica is in talks to acquire a stake in Hong Kong telco PCCW,
operator of the now Broadband TV platform.

Richard Li, PCCW’s chairman, put his 23-percent interest on
the market earlier this year. Offers were received from Australia's Macquarie
Bank and U.S. investment house TPG-Newbridge, but were rejected following
opposition from China Netcom, which holds a 20-percent interest in PCCW and was
concerned about the company falling into foreign hands.

In July, Li reached a deal to sell the stake to Hong Kong
financier Francis Leung, a long-time associate of Li’s father, Li Ka-shing,
Hong Kong’s richest man. Leung is still seeking financing for the deal, and is
in talks with Telefónica and with the charitable trust operated by Li Ka-shing.
According to wire reports, Telefónica would take an 8 percent stake for about
$411 million, the Li Ka-shing foundation would take 9.9 percent and Leung would
control the balance.