Hutchison to sell off a third of O2
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Hong Kong telecoms magnate Li Ka-Shing has pulled together what’s being described as a ‘collective’ of global pension and saving funds to spread the burden of financing Hutchison’s acquisition of the UK O2 network, which he intends to add to his existing ‘3’ network to create a formidable telecoms powerhouse with over 30 million customers.
The original deal, announced properly in March and rumoured for a while before that, saw Hutchison agree to stump up just over £10 billion to pay Telefonica which currently owns O2 (originally BT’s mobile arm). That comprised £9.25 billion with another £1 billion due on completion of the deal.
Now Hutchison has announced its plan to sell one third of the total combined business to a multinational group of investors which, according The Financial Times, will pay £3.1bn for a 32.98 per cent stake. Singapore’s GIC and the Canada Pension Plan Investment Board (CPPIB) will each pay £1.1bn, with the remaining £900m coming from the Abu Dhabi Investment Authority, Quebec pension fund CDPQ and the Brazilian banking group, BTG Pactual.
Hutchison Whampoa attributes the apparent willingness of risk-averse financial entities like the CPPIB to stump up large amounts of cash to their confidence in the UK economy and the EC’s plans to foster a single digital market in Europe.