* Deal worth T$11 bln to T$14 bln -report
* Purchase would come after Hon Hai won 4G licences
* Hon Hai likely to drive hard bargain -analyst
(Adds no comment from Asia Pacific Telecom, subscribers and
base stations, analyst comment, shares)
By Michael Gold
TAIPEI, May 5 Hon Hai Precision Industry Co Ltd
, which makes iPhones for Apple Inc, is in
talks to buy 22 percent of compatriot mobile network provider
Asia Pacific Telecom Co Ltd, local media reported
citing unidentified sources.
The deal will be worth T$11 billion to T$14 billion ($464.48
million) and represent all Asia Pacific Telecom stock held by
government-owned enterprises, the Commercial Times reported on
Any purchase would come after both Hon Hai and Asia Pacific
Telecom won licenses to provide fourth-generation mobile
communications services (4G) on a network widely expected to
come online on this year.
Hon Hai, the world's largest contract manufacturer of
electronic goods, bid for 4G licences after the chairman said he
wanted Hon Hai to diversify from pure manufacturing as sales of
wide-margin smartphones such as the iPhone slow worldwide.
The smartphone market is likely to grow 19 percent this year
from 39 percent in 2013, showed data from researcher IDC.
On buying into Asia Pacific Telecom, which has a market
value of T$49.88 billion, Hon Hai would gain access to 2.1
million subscribers and 3,000 wireless base stations, the
Commercial Times reported.
Still, any deal would not be a game-changer for Hon Hai,
said Yuanta Securities analyst Vincent Chen.
"Asia Pacific Telecom's profitability is only okay, not
great," Chen said. "The deal could help Hon Hai get those 4G
base stations, but I'm pretty sure they'd try to drive a hard
A spokesman for Hon Hai said the company was open to all
forms of cooperation and hoped to offer 4G services as soon as
possible. He declined to comment on the Asia Pacific Telecom
report. Asia Pacific Telecom also declined to comment.
Shares of Hon Hai were 0.1 percent higher in morning trade
on Monday whereas those of Asia Pacific Telecom gained 5.3
percent. The benchmark Taiwan SE Weighted Index was down
($1 = 30.1410 Taiwan Dollars)
(Editing by Christopher Cushing)