It is arguably his smartest gambit yet – unless you happen to be a minority shareholder. Mr Li, through his Singapore-listed holding Pacific Century Regional Developments, and his Chinese state-owned partner are offering HK$4.20 a share for the 52 per cent of PCCW they do not own.
That looks generous on some metrics. It represents a 53 per cent premium to the pre-suspension close (helpfully a record low) and a comparatively generous enterprise value/ consensus earnings before interest, tax, depreciation and amortisation of 6.2 times. But the timing smacks of opportunism: based on the 180-day average, the premium morphs to a 9.5 per cent discount.
Funding the deal is also sweet. If successful, Mr Li – younger son of mega-tycoon Li Ka-shing – and China Netcom will have to write a cheque for US$1.9bn. Some US$2.2bn will then be disgorged from PCCW's balance sheet into their pockets in the form of dividends.