LibertyOne Ltd, one of Australia’s largest internet companies, has confirmed it is in merger talks with an unnamed overseas company which analysts believe to be China.com, the Hong Kong-based, Nasdaq-listed Chinese language internet content and service provider. China.com declined to comment about the merger speculation, leading some observers to speculate that the lack of a firm denail may mean a deal is close.
Just a few months ago, prior to China.com’s US listing, LibertyOne and China.com announced a share swap deal. Sydney-based LibertyOne has also made other overtures in the Hong Kong market and last month bought a 75% stake in Hong Kong web developer Net Power. It also bought 25% of Chinese Books Cyberstore and an 8% stake in e-commerce company HT Hypernet.
LibertyOne has the exclusive rights to develop web portals in Asia-Pacific region for @Home Corp’s Excite@Home subsidiary, and has developed web sites for international celebrities such as golfer Greg Norman and tennis star Patrick Rafter. It provides internet consulting, e-commerce and internet content services mainly in Australia and New Zealand, but is targeting the roll out of Excite sites in Malaysia and Singapore within the next six months, and in the Greater China region within the next year, according to chief executive Allan Hyde.
Listed in Australia, its share price has more than doubled since merger rumors first started circulating early last month. However local analysts feel the shares are vastly overvalued and cite a US Securities and Exchange Commission report which rejected an initial Nasdaq listing registration attempt by LibertyOne last month.
A stockbroker said the merger could be an attempt by the Australian company to achieve the Nadsaq listing without having to go through the SEC. He noted that China.com’s highly-successful IPO was managed by investment bank Lehman Brothers, which is also advising LibertyOne.
China.com, for its part, is licensed to operate in Australia and other Asian countries and could use LibertyOne’s strong presence in Australia to help it expand there. However, it would have to take into consideration the Asian expansion plans of America Online Inc, a direct competitor of Excite@Home which has an 8% stake in China.com.
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