HK Pacific Cent Grp Buys Back 10.5M CyberWorks Shr

Dow Jones Newswires
HK Pacific Cent Grp Buys Back 10.5M CyberWorks Shrs
Dow Jones Newswires

HONG KONG -- Pacific Century Group Holdings Ltd., a wholly owned company of Richard Li, has already bought back a small part of the 240 million shares in Pacific Century CyberWorks Ltd. (H.PCW) that it sold to international investment bank BNP Paribas Peregrine last week.

According to a stock exchange announcement late Monday, Pacific Century Group bought 3.5 million CyberWorks shares on Aug. 9 and 7 million shares on Aug. 10, the two days immediately following the much criticized disposal. The acquisition price wasn't reported, but the shares had traded in a range of HK$16.10 and HK$17.05 during those two sessions.

The 240 million shares were sold after market close on Aug. 9 at HK$15.811 each, representing a 3% discount to the Tuesday closing price of HK$16.30.

Market participants questioned the sale, given that CyberWorks is in the middle of wrapping up its merger with Cable & Wireless HKT (HKT) and that HKT's shares had just been suspended from trading.

At the time of the disposal, CyberWorks defended its actions saying it had been approached by a securities house with a request for 240 million shares and at the time Pacific Century Group, which is one of the major shareholders in the company, was the only party that could quickly come up with that amount of shares. CyberWorks is prohibited from issuing new shares due to the pending merger, it said.

"Given the particular supply and demand situation on the verge of the delisting of HKT and the imminent inclusion of PCCW in the Hang Seng Index and the technical nature of the factors in the market, PCG decided...to make available the 240 million shares required to satisfy the bought deal," it said in a statement at the time of the sale.

Following the three transactions last week, CyberWorks' Chairman Richard Li holds 7.69 billion shares in the company, according to Monday's stock exchange statement.

After the sale of the 240 million shares, which resulted in proceeds of HK$3.8 billion, Pacific Century Group said it plans to keep its remaining stake in CyberWorks for the long term.

Monday the CyberWorks share fell 65 HK cents, or 4.1%, to HK$15.35.



 

Charge your cards for swipe at future
Big players are jostling for positions in the electronic payments industry.






http://www.smh.com.au/news/0008/15/business/business2.html
Leonie Wood reports.



Telstra has asked Mr Richard Li's Pacific Century CyberWorks to become a third partner in the local carrier's new electronic funds transaction alliance with Keycorp.

The talks have been put on hold until Telstra and Keycorp secure shareholder approval for their $513 million deal and until Telstra and PCCW formalise their planned global joint ventures.

However, Keycorp managing director Mr Michael Thomes said the proposal to use PCCW's NOW broadband unit to remake content suitable for cashiers' terminals was still "definitely on the cards".

Keycorp was interested in gaining access to PCCW's global network but said "there was definitely no equity discussions".

Telstra last month agreed to take a 50.1 per cent stake in Keycorp as consideration for its electronic payments businesses, which mostly comprise the profitable activities of Telstra Argent and Transend, plus terminal maintenance and service activities.

Until now, banks wanting to get their merchants online would go first to Keycorp for the hardware and software and then to Telstra to get the network installed. The new deal creates a one-stop shop for these banks. For Telstra, the key to the success of the deal is how it manoeuvres the carrier to a strategic juncture in the electronic payments industry.

For Keycorp, it now has an influential partner to pay for its global expansion plan. Its aim is to provide banks overseas with complete EFTPOS installation, data management and services and telecom carriage for their merchant customers.

Ultimately, that means challenging the formidable global position held by US-based Transaction Network Services, owned by the highly acquisitive US Internet service provider PSINet.

Yet sources said that for Telstra the Keycorp alliance was also a defensive strategy to hold its share of electronic payments carriage in its home market. As electronic commerce and the associated flow of transactions accelerate, the payments industry is facing dramatic change, with retailers and other non-banks anxious to sit alongside the banks as clearers.

The Australian Competition and Consumer Commission also wants more players with suitable financial credibility to enter the payments processing chain and help dismantle what it deems a cartel in the credit cards sector.


Telstra's head of emerging businesses, Mr Gerry Sutton, conceded the carrier was "definitely trying to step up from being just a provider of the pipe and [instead] be engaged in the payments [business]".

Telstra has struggled to find ways to capture a permanent and growing slice of the EFTPOS industry.

However, Telstra is adamant that it does not want to be either a clearing house for e-commerce transactions or a bank. It does not have the balance sheet flexibility to accept financial liability and, importantly, its executives do not have the stomach to manage a telco-###-bank in direct opposition to its biggest customers.

By contrast, retail giant Coles Myer, which has its own telecommunications switch to handle all its in-store transactions as well as purchases from its 18,000 external suppliers, may go all the way to becoming a clearance house. That would enable Coles Myer to take title over every transaction handled by its switch. The ramifications are significant when one considers its participation in not one, but two, business-to-business networks.

If participants in the B2B networks sourced goods from any of Coles Myer's suppliers, or B2B partners, and ran the deal through the retailer's switch and proposed clearance facility, Coles could take a clip from every deal.

That presents an interesting threat for Telstra and the banks.

Mr Thomes said every player was trying to lift its share of an industry, which globally is estimated to carry $US4.3 trillion ($7.3 trillion) of transactions a year. With consumers generating about two billion EFTPOS dial-up transactions a year, Telstra appears to be reaping about $50 million a year from this service alone. Still, the banks take the biggest slice and, as Mr Thomes suggested, "it could be lucrative for somebody to break that up".

Yet a great deficiency of the EFTPOS network in Australia is that it does not have Internet access. Mr Sutton said Keycorp and Telstra wanted to add layers of content, such as loyalty programs and information services, to the terminals and maximise the retailers' usage rates.

Coles Myer's system already incorporates loyalty data, which enables it to analyse a range of data right down to the spending behaviour of individual customers.

A similar system overlaid on Keycorp terminals could allow customers to say, buy clothes using their frequent flyer points, help merchants tailor special promotions to suit particular customers, or simply supply running football scores across the screen.

Hence Telstra's enthusiasm for bringing in PCCW to micro-manage the content: PCCW would manipulate content applications to suit various transaction devices such as in-store personal computers or hand-held mobile units for on-road sales staff. How Telstra and Keycorp charge merchants for that content is far from decided.

 

Start the Bidding

Ira Chaplain for Asiaweek.
Richard Li has escaped from dad's shadow to be a formidable entrepeneur.


Li Ka-shing's only competition to be the year's Best Dealmaker was his son
By TIM HEALY

ALSO
• The year Richard built a company
• The Best Initial Public Offerings

In this Golden Age of the Deal, the only hard part about picking Asia's Best Dealmaker was deciding which guy named Li wins. It could be Li Ka-shing, the archetypal Asian tycoon (and Asiaweek's Most Powerful Person three months ago) who late last year parlayed an investment of a few hundred million dollars in 1992 into a $14.6 billion cash-and-stock windfall from the sale of cellular company Orange. Li's Internet start-up Tom.com went public in March. Its initial offering was oversubscribed 669 times and investors valued the IPO at $2.8 billion.

These deals and others help make the elder Li Asia's second-best dealmaker; No. 1 goes to son Richard Li Tzar-kai. The younger of Ka-shing's two sons has rivaled and surpassed his dad as a dealmaker in the past 12 months on the strength of a company, Pacific Century CyberWorks, that didn't exist 13 months ago. Since it was founded in August 1999, PCCW has entered into more than 50 deals ranging from its $38 billion purchase of Cable & Wireless HKT to a minor share in Pets.com, an Internet portal offering services and advice to pet owners.

The deals have transformed Richard from the scion of a legendary Asian businessman to a true Hong Kong celebrity. Like any billionaire young bachelor with two yachts, a private plane, apartments around the world, and a dynamic and growing Internet investment company (can you think of any others?), Li has become engulfed by the press. His every move is charted by both serious business journals and silly tabloids. To a few, he remains Li Ka-shing's boy wonder, but to many he is nothing less than Asia's Bill Gates — and certifiably his own man.

Richard and PCCW actually leave footprints throughout the pages that follow focusing on The Best in Asian business. The company's back-door listing a year ago disqualifies it from our list of IPOs (see opposite page). But PCCW is the 10th-best performing stock in Asia over the past 12 months. Our pick for Best Fund Manager, Peter Chau, deputy managing director for TAL CEF Global Asset Management in Hong Kong, acknowledges that he owes a good piece of his success to PCCW, which at the end of 1999 was his fund's largest single holding. And while neither Li nor his company are mentioned in Best Advocate for Shareholders' Rights or Best Cost Cutter, they represent — like the winners of those categories — a new way of doing business that is challenging past mistakes.

Not to say that the importance of personal relationships and friendly governments are disappearing in the region. Far from it. But new Asian dealmakers like Richard Li who combine tried and tested business techniques with modern ones are certainly in ascendancy. The last 12 months have seen a surge of deals followed by a stock crash followed by a tentative market recovery. What comes next is anyone's guess. But keep your eyes out for a Li at the center of the action. Richard, that is.

The Year Richard Built a Company
Since Richard Li Tzar-kai formally launched Pacific Century CyberWorks a year ago, the company has done more than 50 separate deals. And that doesn't include the biggest one: the takeover of Cable & Wireless HKT. Here are just a handful of the deals PCCW has been involved in over the last 12 months:

• Several alliances and joint ventures to invest in and incubate technology companies. Together with CMGI, it launched CMGI Asia to invest in Internet companies. PCCW owns one-fifth of the Asia Java Fund, which is managed by VC-investor AsiaTech Ventures. It has been rumored to be looking to buy the troubled Japanese technology investor Hikari Tsushin. PCCW denies the rumor.

• Investments in several companies have expanded PCCW's reach. PCCW owns 5% of Thrunet, South Korea's leading broadband Internet access service. In May it formed an alliance with an ISP in Taiwan called GigaMedia. Stakes in Indian ISPs like DAP make PCCW a leading international Internet player on the subcontinent. And the company owns small pieces of leading Chinese portals Sohu.com and Sina.com.

• Content providers have been a favorite. PCCW holds less than 5% of ETNet.com, a Hong Kong financial data portal started by the Hong Kong Economic Times newspaper. It owns one-quarter of Point Property, which provides property data on a few key Asian cities. And it holds a 4% stake in Tom.com, the China-focused portal started by Li Ka-shing's Cheung Kong Holdings and Hutchison Whampoa.

• PCCW has taken stakes both big and small in a wide variety of other technology equipment companies, business-to-business Internet portals and sites directed at consumers. For instance, it bought 80% of a data center and Internet facilities management company called iLink.net. It owns 12.5% of Digiscent, which aims to deliver olfactory messages electronically. And it has 20% of StarEastNet.com, a celebrity website aimed at connecting stars with their fans.


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Richard Li verlässt Board von Hutchison Whampoa


vwd HONGKONG. Richard Li, Chairman der Pacific Century CyberWorks Ltd, wird als Vice Chairman und Executive Director der Hutchison Whampoa Ltd, Hongkong, mit sofortiger Wirkung zurücktreten, wie Hutchison am Mittwoch mitteilte. Die Meldung kam einen Tag nachdem CyberWorks die Offerte an die Aktionäre der Cable & Wireless HKT Ltd abgeschlossen hatte.
Mit der Fusion der beiden Unternehmen, die am Donnerstag wirksam wird, treten Hutchison und CyberWorks sowohl im Festnetz- als auch im Mobilfunkbereich in direkten Wettbewerb. Li hatte seinen Schritt bereits im Februar, nach Zustimmung der britischen Mutter zum Verkauf des 54-Prozent-Anteil an ihrer Hongkong-Tochter an CyberWorks, angekündigt.



HANDELSBLATT, Mittwoch, 16. August 2000

 

People in Focus        16 Aug 2000
From Financial Times
Richard Li Dossier  
Richard Li cuts the ties that bind


By Ruth Sullivan


Richard Li, Pacific Century CyberWorks' founder and chairman, severed the last remaining ties with his father's business empire on Wednesday by resigning his directorships at Hutchison Whampoa.


"It had got to the point where there were just too many conflicts and I took the decision to stand down," said Richard Li in London.

Mr Li, the youngest son of Hong Kong billionaire Li Ka Shing, has recently carved out his own mini-empire through PCCW and is poised to transform the previously obscure internet group this week by completing the formal US$36bn takeover of Hong Kong Telecom from Cable & Wireless.

Although he likes to distance himself from his father, there are some striking similarities in the business practices of father and son. Like his father, Richard Li has learned to be a sharp dealmaker with a good sense of timing.

He is beginning to match his father's skills in driving hard deals. His quick assault on Cable & Wireless hijacked a proposed merger between Hong Kong Telecom, Singapore's SingTel and Rupert Murdoch's News Corp.

In 1993 he pulled off another sharp deal. He sold Star TV, an Asiawide satellite network which he launched at the age of 24, to Rupert Murdoch for an estimated $950m, and used the capital to set up PCCW.

Richard Li looks the part of an internet start-up boss. Sporting a crew cut, Mr Li has ditched the smart suits and briefcases he wore in an earlier business era, instead opting for open-necked shirts, sharp jackets and trendy backpacks.

He is both energetic and frenetic and "never seems to sleep" say people close to him. He drives himself and everyone around him hard and his high expectations of others reportedly make him difficult to work with.

Not suffering fools gladly, he surrounds himself with smart managers and is quick to reward talent. Some managers who have worked with him describe him as "young, arrogant and too full of himself" but others say he has now matured and is less given to throwing tantrums. When he was running Star TV, staff trembled as he shouted into the intercom system, known as the bark box.

Nobody could accuse him of a calm career. After graduating from Stanford University in 1987 with a degree in computer science, and studying briefly at Harvard and London Business School, Mr Li worked at Gordon Capital, an aggressive Canadian investment bank.

Later he joined the family business for a turbulent period when he clashed with a tough-nosed ex-Foreign Legion executive. Setting up Star TV with family money was the first step into running his own business.

Richard Li is a product of a business from birth. As a little boy he used to sit silently with his older brother Victor at board meetings of the most powerful business family in Hong Kong, chaired by his stern father. At 13 he was bundled off to Menlo Park, an exclusive school in Silicon Valley where he spent some unhappy years.

Even if his early life was not happy, the young businessman knows how to cut a social dash. Known as "Asia's most eligible bachelor," his New Year party in Hong Kong where he flew in singer Whitney Houston is still the island's most talked about event.

Analysts who have been following his progress say it is now time to prove that he can turn a profit. Star TV was not in profit when he sold it, and his young internet company is ecpected to remain loss-making for some time.

People who have been involved in current negotiations with him, such as Graham Wallace, chief executive of Cable & Wireless, say they like him because "he has a quick mind and thinks ahead." But Mr Wallace cannot help adding that "it helps to have a rich father".


 

Asianews


PCCW Merger mit C&W für 28 statt 38 Mrd. US$


Der Merger zwischen PCCW und C&W HKT geht jetzt für
umgerechnet 28 Mrd. US-$ über die Bühne.
Wie angekündigt zahlt PCCW in Cash und Aktien.
Dabei will PCCW den Aktionären 11,32 Mrd. $ in Bar geben und
schließlich mit  weiteren 8,67 Mrd. Papieren im gegenwert von 133
Mrd. HK-$ zahlen.
Somit fließen  den Aktionären dann noch einmal umgerechnet 17
Mrd. US-$ zu. Insgesamt erhalten die Aktionäre von C&W somit rd.
28 Mrd. US-$. Immerhin satte 10 Mrd. weniger als im Februar, als
das Angebot von Richard Li gestellt wurde.

Der Rückgang spiegelt die Kursverluste  von PCCW seitdem wieder.


                                                                -fjs- 17.08.00 10:08:00  

17:25  17-AUG-2000
'PCCW to become company with high growth rate"

Pacific Century CyberWorks (PCCW) will become a company with high growth rate if its IP network trunk business or B2C business has a good run, chairman Richard Li said.

However, Mr Li declined to state the schedule to multiply the market capitalisation of PCCW but believes that the objective can be realised in the near future.
Commenting on the great selling pressure of PCCW shares (for example, Cable & Wireless Inc may divest about 4.9 pct PCCW shares), he said that all strategic partners holding shares in the company will observe the lock-up period.