China’s Citic Telecom in $1.2 Billion Deal for Macau Phone Company
HONG KONG—Shares in Citic Telecom, a unit of the state-backed Chinese conglomerate Citic Group, soared after it announced a $ 1.2 billion deal to take control of the dominant telecommunications company in the casino hub of Macau.
Citic Telecom’s stock rose as much as 18 percent on Monday in Hong Kong after an announcement Sunday that it would pay $ 1.2 billion to Britain’s Cable & Wireless Communications and Portugal Telecom to acquire a further 79 percent of Companhia de Telecomunicações de Macau.
The deal will give Citic Telecom 99 percent control of the monopoly fixed-line telephone and data operator in the former Portuguese colony as it seeks to build its footprint in the Greater China telecommunications business. Citic Telecom had owned 20 percent of C.T.M. Macau Post, controlled by the local government, and will retain a 1 percent stake.
Citic Telecom, a unit of the state-backed Citic Pacific group, will pay $ 750 million to Cable & Wireless for its 51 percent stake, and another $ 412 million to Portugal Telecom for its 28 percent share.
Citic Telecom said it will finance the deal with cash and new bank loans. Barclays acted as its financial adviser on the deal.
In a statement, Cable & Wireless said it was selling its C.T.M. stake as part of a broader strategy to sell off disparate assets and focus expanding its business portfolio in Central America and the Caribbean.