News Corp joins offer for telco assets

Rupert Murdoch's News Corp has joined Macquarie Bank's US$7.3 billion ($12.2 billion) bid for the phone and media assets of Hong Kong's PCCW, The Australian newspaper reported yesterday.

Citing sources in Hong Kong, the newspaper said the company had taken a "modest" stake in the Macquarie consortium, possibly around 10 to 20 per cent.

"It is believed that there is at least one other player in the Macquarie Bank consortium, in addition to News Corp," the newspaper said.

News Corp's Australian arm, which owns The Australian, declined to comment on the deal.

PCCW and Macquarie declined to comment yesterday.

News Corp was part of a bid for PCCW's main assets in early 2000, pledging US$1 billion to back a takeover effort by Singapore Telecom for Cable & Wireless HKT, Hong Kong's former phone monopoly.

SingTel lost out in that takeover battle to PCCW, controlled by Richard Li, the son of Hong Kong's wealthiest businessman, Li Ka-shing.

The younger Li had built his business reputation by founding the Star TV satellite service and then selling it to News Corp for US$950 million.

The Macquarie-led group is bidding against US buyout firm Texas Pacific and its Asian investment arm, Newbridge Capital Group, which has offered US$7.55 billion, including debt, for the core assets of Hong Kong's dominant fixed-line carrier.

Looking to secure Beijing's blessing for the deal, both teams are offering state-owned China Network Communications Group (Netcom), the second-biggest shareholder of PCCW, up to a 50 per cent stake in the assets.

Shares in PCCW fell 0.9 per cent yesterday to HK$5.45 amid a broader market decline.

- REUTERS