Private equity firms eyeing Hutchison fixed line phone business: sources

A final decision on the sale is likely to be known by the end of this week.

According to sources familiar with the matter at hand, a consortium of private equity firms, including, TPG Capital Management LP, I Squared Capital Advisors LLC and MBK Partners have placed their separate bids for the fixed-line phone unit of Li Ka-Shing, Hong Kong’s richest man.

Incidentally, Hutchison Global Communications Ltd (HGC), a unit of Hutchison Telecommunications Hong Kong Holdings Ltd, provides a range of fixed-line telecommunications services in Hong Kong as well as in overseas markets for corporate and residential users.

HGC’s earnings before interest, tax, depreciation and amortization (EBITDA) was $161 million for 2016 is likely to be valued in the range of $1.2 billion to $1.5 billion, said three sources familiar with the matter at hand.

They went on to add, a final decision on the sale process is likely to be taken sometime next week.

Sources have preferred the cover of anonymity since these transactions have yet to be made public.

Earlier, the HGC sale had drawn interest from Hong Kong’s broadband and telecoms service providers, HKBN Ltd and SmarTone Telecommunications Holdings Ltd, revealed the sources.

However both of them have dropped out of the bidding war over concerns stemming from valuations and potential anti-trust regulatory hurdles, said two sources without providing further details.

Hong Kong-based CITIC Telecom International Holdings Ltd, is however still weighing its bid and is expected to take a final call by the end of this week.

While spokespersons for HKBN, MBK and HGC declined comment, CITIC Telecom, TPG, SmarTone and I Squared Capital, did not immediately respond to requests for comment.


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