C&W HKT board recommends takeover offer

The board of directors of incumbent Hong Kong telecommunications carrier Cable & Wireless HKT will recommend that shareholders approve the company's takeover by Pacific Century CyberWorks (PCCW), the company said last week.

The board was expected to make its unanimous recommendation in a circular to HKT shareholders set to be released on Friday. Though it was expected, the move marks one more step towards completing a deal that has come under question from some observers, following a decline in PCCW's stock price.

Since it reached a preliminary takeover agreement with HKT parent Cable & Wireless PLC on Feb. 29, PCCW's share price has lost more than one-third of its value. In February, PCCW offered shareholders a deal valued at betwen $US36 billion and $38 billion, with two options: straight shares or shares plus cash.

HKT has scheduled its shareholders' meeting to vote on the proposal for July 3, according to the company's statement. The timeline has been pushed back because of court delays, an HKT spokesman said last week. Before the HKT shareholders' meeting, Cable & Wireless shareholders will meet in London to vote the deal up or down.

The takeover, in which the carrier would become a wholly-owned indirect subsidiary of PCCW, is currently set to become effective August 10, according to HKT's statement.

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