PCCW pulls out of Cable and Wireless bidding

The potential bidder circling telecoms group Cable & Wireless pulled out of the running today after a weekend of intense takeover speculation.

Hong Kong-based Pacific Century Cyberworks (PCCW) made an unsuccessful request for talks on December 31 and had been expected to make a further move this week.

But PCCW said the response of C&W to its first expression of interest suggested the outcome of a second approach would be difficult to call and result in further uncertainty for the company.

Weekend reports said chairman Richard Li, son of the Asian billionaire Li Ka-shing, had been preparing to make a takeover offer for the troubled telecoms company, which has seen its share price slump in recent months.

The speculation led PCCW to request a suspension of its shares on the Hong Kong Stock Exchange while it prepared its response.

The subsequent statement said: “The company has concluded that it is not in the company’s interest for the continuing uncertainty regarding any possible takeover offer for C&W to continue.

“Accordingly the company has today decided that it will not make any further approach to C&W and will not make any offer for C&W.”

The first approach to C&W was rejected by new chairman Richard Lapthorne on January 27 and was then followed by a statement from PCCW on Thursday of last week confirming that it was still considering its options.

It was thought PCCW, which controls Hong Kong Telecom, had been attracted by combining businesses in areas such as Macau and the Caribbean, where the London-based company’s more successful regional operation is focused.

However, it also stressed last week that it would need full access to C&W’s books before it could consider proceeding further.

Reports at the weekend said Mr Lapthorne was under increasing pressure from shareholders to agree to talks.