The battle for control of Hong Kong’s PCCW telecommunications company appeared to end dramatically on Monday night when Richard Li, its chairman, agreed to sell a 23 per cent stake in the company for HK$9.2bn ($1.2bn) to veteran investment banker Francis Leung. Mr Li had failed to sell the company’s core assets to foreign investors.

The unexpected development was a blow to attempts by Australia’s Macquarie Group and TPG Newbridge, the US buy-out group, to acquire PCCW’s telecoms and media assets. China Netcom, PCCW’s second biggest shareholder, which opposed any sale to foreign groups, is backing Mr Leung’s purchase. The agreement will also please Beijing, which had signalled that it did not want PCCW to be sold to foreign buyers.

Mr Li said last night: “It may not be as good as a successful asset sale but the circumstances dictate that we cannot have an asset sale. So the best I can do is to entertain the local Hong Kong consortium, which meets the concerns of Netcom and the company.”

Mr Leung, a part-time Citigroup adviser with close ties to Li Ka-shing, Hong Kong’s most powerful tycoon and Mr Li’s father, will buy the entire 23 per cent stake held by Singapore-listed Pacific Century Regional Developments, PCCW’s biggest shareholder controlled by Mr Li, for HK$6 a share.

Mr Li, who owns 75 per cent of PCRD, will pay minority shareholders in PCCW HK$1.38bn, or HK$0.33 to HK$0.38 a share, after the sale. This is the difference between Mr Li’s proceeds from the divestment and the value of his stake at HK$4.8, or PCCW’s share price before the bidding war emerged more than three weeks ago.

Mr Li is keeping his 3 per cent direct investment in PCCW.

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