HongKong Telecommunications Ltd is planning to spin off its internet business and cash in on sky-high valuations by seeking a quotation on Nasdaq. The news boosted its share price at the end of last week with the shares rising almost 6% on Friday alone. Officially, HK Telecom refused to comment but it is known they are seeking advice on the plan from international bankers.
Development of internet services has been a priority of HK Telecom and the company has a strategic partnership, called Zoom, with Microsoft Corp to deliver a wide-range of internet services via a broadband network.
The company has just begun to expand its interests in Asia and last month bought 85% of FIC Network Services, a Taiwanese internet service provider, for $5m. The acquisition was HK Telecom’s first internet investment outside Hong Kong but chief executive Linus Cheung said it will not be the last (CI No 3610).
With the kind of market value that a Nasdaq quote would likely give the company, the internet arm of HK Telecom would probably be well-advised to engage in further acquisitions.
