Hong Kong Broadband Operator HKBN Attracts Billion-Dollar Bids
US Investment Firm I Squared Capital Enters the Fray
In a surprise move, US-based infrastructure investment firm I Squared Capital is considering a bid for Hong Kong-listed broadband operator HKBN, which could value the company at up to $1 billion. This potential offer trumps an earlier bid by China Mobile, the world’s largest wireless carrier by subscribers, which valued HKBN at $882 million.
Competitive Tension Heats Up
The higher offer from I Squared Capital adds competitive tension to the prolonged buyout process of HKBN, as China Mobile seeks to extend its footprint outside mainland China. I Squared Capital is expected to present its offer by the end of this month, although the timing is still fluid.
Offer Structure Under Consideration
I Squared Capital is weighing the inclusion of a non-cash component in its offer structure, according to sources familiar with the situation. The firm, which has over $40 billion in assets under management, has a history of discussing potential buyouts with HKBN, including a failed attempt in 2023.
HKBN’s Struggles
HKBN shares have taken a hit, closing at HK$5.25 on Tuesday, giving the company a market cap of $883 million. The company has lost a staggering 65% of its market value since April 2020, when its share price was at its highest over the last five years.
Company Profile
Founded in 1999, HKBN provides a range of services, including internet, data centre, and WiFi services. In 2018, the company announced a $1.34 billion acquisition of fixed-line operator WTT, making private equity shareholders MBK Partners and TPG significant stakeholders.
Private Equity Investors Seek Exit
MBK Partners and TPG, who became HKBN’s shareholders after the WTT acquisition, are now seeking to exit the company in the potential buyout. Both firms declined to comment on the matter.
The Future of HKBN
As the bidding war for HKBN heats up, the company’s future hangs in the balance. Will I Squared Capital’s potential offer be enough to sway shareholders, or will China Mobile’s bid ultimately prevail? Only time will tell.
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