HONG KONG, April 11 Private equity firm CVC Capital Partners will pay around HK$5 billion ($644 million) to buy telecom and broadband assets of City Telecom H.K. Limited , the Hong Kong-listed company said on Wednesday, in Asia's largest private equity-backed deal this year.
CVC's latest Asia media sector acquisition adds to last year's $269 million purchase of a 49 percent stake in the Indonesian cable TV and Internet businesses of First Media from the Lippo Group..
The London-based buyout firm also owns Australian TV network Nine, but is locked in a battle with hedge funds for control of the company, and its troubles in Australia have led CVC to focus more attention on Asia.
City Telecom will use the proceeds from the sale of its telecommunications-related businesses in Hong Kong and Canada to build out its free-to-air television service, which includes a multimedia centre and is expected to cost HK$2.5 billion over the next four years.
The deal pushed up City Telecom's shares as much as 12.9 percent when trading resumed on Wednesday after being suspended from the start of the month.
The company expects to be one of three new recipients of free-to-air licences in Hong Kong, it said in a statement.
The deal is backed with a HK$2.5 billion loan from Standard Chartered Bank and J.P. Morgan.
Morgan Stanley Asia private equity's $300 million purchase of a minority stake in China's Tianhe Chemicals Group last month is the region's No. 2 private equity deal this year, according to Thomson Reuters data..
CVC's latest Asian investment comes at a time when the buyout firm is readying to list the Formula One motor racing series in Singapore in a nearly $1.5 billion IPO. .
CVC acquired Nine for A$5.3 billion in cash and debt from media baron James Packer in several transactions between 2006 and 2008.
But hedge funds have acquired over half the A$2.7 billion debt maturing in February 2013, and are trying to take control of the media company.
CVC is acquiring the City Telecom assets through Metropolitan Light Company Limited.