I Squared Capital’s bid for HKBN weighs up to $1 billion, sources say

By Kane Wu and Julie Zhu

HONG KONG (Reuters) – U.S.-based infrastructure investment firm I Squared Capital is weighing a bid that could value Hong Kong-listed broadband operator HKBN at up to $1 billion, two people familiar with the deal said.

I Square Capital’s offer beat China Mobile’s earlier bid of HK$5.23 per share. The sources said it would raise its bid, but said the company was not willing to pay HK$6 for each.

The high-priced offer will add competitive tension to HKBN’s long-running acquisition process, as rival China Mobile seeks to expand the footprint of the world’s largest wireless carrier outside mainland China by subscribers.

I Squared is looking to make the offer later this month, but the timing is still fluid, said one of the sources and two other people familiar with the situation, who all spoke on condition of anonymity because the information is confidential.

I Square is considering including a non-cash component in its offering structure, one of the four sources said.

Miami, Florida-headquartered I Squared Capital declined to comment. HKBN did not immediately respond to a Reuters request for comment.

HKBN made an offer in early December worth HK$6.86 billion ($882 million) after state-owned China Mobile expressed interest two years ago.

With more than $40 billion in assets under management, I Squared discussed a potential acquisition with HKBN in 2023, which came to nothing.

HKBN shares closed at HK$5.25 on Tuesday, giving it a market value of $883 million. The company has lost 65 percent of its market value since April 2020, when the stock price was the highest in the last five years.

In the year Established in 1999, HKBN provides internet, data center and WiFi services, among others.

In the year In 2018, fixed line operator WTT (WTT) announced a $1.34 billion acquisition.

WTT’s private equity shareholders MBK Partners and TPG became shareholders of HKBN after the transaction.

Those two investors are looking to exit the company in a possible buyout, separate people familiar with the situation said.

MBK and TPG declined to comment.

(Reporting by Ken Wu and Julie Zhu. Editing by Jane Merriman)