US-based I Squared Capital dumps plans to make separate offer for Hong Kong’s HKBN

[HONG KONG] US-based infrastructure investment firm I Squared Capital has withdrawn plans to make a takeover offer for Hong Kong’s HKBN, the broadband operator said on Monday (Jun 30), as a competing bid backed by a state-owned entity takes centre stage.

The announcement comes over a month after Reuters reported that China Mobile was nearing a deal to take over HKBN with I Squared having dropped out.

I Squared already owns Hong Kong-based broadband provider HGC Global Communications, in which China Investment Corp holds a minority stake.

However, the Miami-based firm has so far been unable to secure approval from the Chinese sovereign wealth fund to proceed with a formal bid for HKBN, according to the Reuters report.

Rival suitor China Mobile built a 15.5 per cent stake in HKBN from buyout company TPG and has offered HK$7.8 billion (S$1.3 billion) for the broadband firm.

I Squared was preparing to trump China Mobile’s offer of HK$5.23 per HKBN share, which was made in December, but was not keen to pay more than HK$6 apiece, Reuters reported in January.

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HKBN CEO William Yeung said in May it was a “rumour” that China Investment Corp had vetoed I Squared’s plan to present a formal offer for HKBN.

The takeover offer from China Mobile was not good enough and HKBN was open to engage with more bidders to get the best value for its shareholders, Yeung had said.

“Despite the HKBN CEO’s comments that the China Mobile offer is not good enough, China Mobile has no pressing need to bump if a competing offer fails to materialise,” Smartkarma’s Arun George said in a note before HKBN’s announcement on Monday.

I Squared Capital did not immediately respond to Reuters’ request for comment over why it decided to walk away from making an offer.

China Mobile also did not respond to a request for comment. REUTERS