HKBN is ‘front runner’ for Wharf acquisition

Alan Burkitt-Gray
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Hong Kong Broadband Networks and SmarTone are competing with private equity groups to buy Wharf Holdings’ telecoms unit

Hong Kong Broadband Networks (HKBN) is competing with private equity groups and SmarTone to buy the telecoms arm of Wharf Holdings.

The Wharf is hoping to raise up to $1.2 billion in the sale of Wharf T&T, which is believed to be Hong Kong’s second largest fixed-line operator for the business market.

Reuters reports that HKBN, SmarTone and private equity group KKR have placed bids, while two other private equity investors, MBK Partners and TPG Capital Management, have made a joint bid. Three other unnamed companies have bid, said the agency.

SmarTone Holdings owns mobile operations in Hong Kong and Macau, both special administrative regions of China.

HKBN is the front runner, suggested Reuters, but as it owns an extensive fixed-line business – mostly aimed at consumers rather than business customers – it would face close scrutiny.

HKBN split from founding group City Telecom in 2012 as a management buyout backed by private equity group CVC. It raised $750 million in a share flotation in 2015 and bought a business telecoms operator, New World Telephone, for $83 million in February 2016.