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The Divestiture of Cable & Wireless HKT Limited  
Product Ref: 00/73C Company: Cable & Wireless HKT Limited

Product Type: Case Industry: Telecommunication Services

Related Product(s): Teaching Note
Authors: Ko Wang   Su Han Chan   Mary Ho
In late January 2000, Cable & Wireless plc ("C&W") and Singapore Telecommunications Limited ("SingTel") unveiled a proposed merger of equals between Cable & Wireless HKT ("HKT") and SingTel. Both HKT and SingTel were the leading telecoms operators in their local markets, and a merger between the two would create the second-largest full-service telecoms provider in Asia outside Japan. Nonetheless, the proposed deal was received coolly in Hong Kong and Singapore owing to uncertainty over its political and financial ramifications. C&W anticipated that the Chinese government would prefer to keep HKT in local investors' control, and had therefore considered the possibility of receiving offers from potential suitors in Hong Kong, possibly including Pacific Century CyberWorks Limited ("PCCW"). To respond to SingTel or any other potential bidders, C&W had to prepare itself for the negotiations and find a fair value for its stakes in HKT. "The Divestiture of Cable & Wireless HKT Limited" is part of a three-part case series that includes "Singapore Telecommunications Limited: The Bid for Cable & Wireless HKT Limited", and "Pacific Century CyberWorks Limited: The Bid for Cable & Wireless HKT Limited". The three cases can be taught singly or can be combined into a bilateral/trilateral negotiation exercise where students are assigned parts to play. Please refer to the teaching note (ref. no.:00/72TN), "The Bid for Cable & Wireless HKT Limited", for a detailed teaching plan for a bilateral/trilateral negotiation exercise. "The Divestiture of Cable & Wireless HKT Limited" serves as a useful vehicle for students to discuss the motives behind a divestiture and the impact of divestiture on a firm's value and to exercise valuation skills in a merger negotiation.
Functional Area : Finance & Investments
Human Resource Management
Strategy & General Management

Issues: Merger And Cross-Border Investment
Length: Text: 8 pages
Exhibits: 17 pages
Country: Hong Kong SAR
Singapore (Rep. of)
United Kingdom

Pub. Year: 2002 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
This case is UGC funded.
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