| HONG KONG, April 11
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
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.