Posted by: Bruce Einhorn on June 26, 2006
As the battle for PCCW’s telecom and media assets heats up, lots of people are speculating about Richard Li’s next move. I wrote last week that Macquarie was interested, and since then Texas Pacific Group’s Newbridge Capital has made a bid, with others thinking of having a go as well. Li stands to make a nice pile of money that he can use for new deals. The Hong Kong press has reported that he’s interested in buying control of a local newspaper and/or a stake in TVB, run by Sir Run Run Shaw, the nonagenarian businessman who used to rule the city’s movie industry and now controls its leading free-to-air TV station.
Who knows what Richard’s next move will be. But he might want to stay clear of mainland China for a while. State-owned China Netcom paid $1 billion for a 20% stake in PCCW only last year, and from all accounts the folks at Netcom are none too pleased about Li’s sudden interest in selling off most of the company’s prize assets. After news first broke last week of the possibility of a sale, Netcom came out with a statement saying “We do not want to see any changes in PCCW…nor any changes in its key assets.”
Li’s billionaire father, Li Ka-shing, became Hong Kong’s richest man thanks in large part to his cultivation of relationships (aka guanxi) in China, yet Richard seems willing to antagonize one of the most important state-owned companies around. Either Richard Li knows that years of economic reforms mean that guanxi isn’t so important in China anymore – or he has plans to focus his attention elsewhere.