Shareholders of Cable & Wireless HKT, Hong Kong's dominant telecommunications carrier, approved yesterday the company's acquisition by local Internet firm Pacific Century CyberWorks (PCCW).
Holders of 97.36 percent of HKT's shares voted in favour of the merger, delivering a victory for PCCW that was signaled weeks in advance by an approving vote at UK-based Cable & Wireless PLC, which holds 54 percent of C&W HKT shares. Approval of the deal required a 75 percent vote in favour.
"The merger approved (yesterday) represents a significant event and change of direction to take the company even further into the Internet and e-commerce and all the other things that are coming from the new technologies," said Sir Brian Smith, chairman of C&W HKT, at a press conference here following an Extraordinary General Meeting of C&W HKT shareholders at which the vote was taken.
The deal still needs approval from Hong Kong's Court of First Instance, but if this is received as expected in late July, shares in the as-yet unnamed combined will begin trading on August 15, Smith said.
The change in C&W HKT's focus is also seen as symbolic of a shift in Hong Kong's attention from property and trading businesses toward an Internet-based future in which this Special Administrative Region of China wants to be an electronic communications and trading hub for Asia.
The merger is a major step forward for PCCW, which is aiming to become a broadband multimedia service provider and Internet holding company with a global profile. PCCW, the territory's flagship Internet company, is lead by Richard Li, the son of Hong Kong's most prominent old economy tycoon Li Ka-Shing. After the merger it will have a market capitalization of some $HK290 billion ($US37 billion), putting it on a par with global Internet leaders.
The start-up plans to use C&W HKT's broadband network as a springboard for delivery of its Network of the World multimedia broadband service, which was launched last week and is intended eventually to be carried over satellite and cable TV networks to most of Asia.