Hutchison Whampoa is reportedly in advanced talks to sell minority stakes in the future combined Three-O2 holding company to the Canada Pension Plan Investment Board (CPP) and the Government Investment Corporation of Singapore (GIC).
CPP and GIC will…
Hutchison Whampoa is reportedly in advanced talks to sell minority stakes in the future combined Three–O2 holding company to the Canada Pension Plan Investment Board (CPP) and the Government Investment Corporation of Singapore (GIC).
CPP and GIC will each pay £1bn for stakes in the merged operator, which will have an enterprise value of £15bn, according to a Sky News report citing insiders.
A provisional agreement with the funds may be reached this week, but it is not clear that an announcement will be forthcoming and one may not appear before completion, the report said.
Neither Hutchison, CPP nor GIC responded to requests for comment before the press deadline.
Hutchison signed a binding agreement with Telefonica to buy O2 for £10.3bn (US$15.3bn) in late March, which it plans to combine with its smaller UK unit Three.
The Hong Kong group will pay an initial £9.25bn at closing, and a further £1bn provided the cash flow of the combined Three-O2 reaches a certain threshold. Hutchison will part-fund the deal with a £6bn (US$9bn) bridge facility signed with HSBC, to be refinanced further down the line.
The rest will be paid with Hutchison’s own cash resources, which investments from the funds would help.
Approval from the European Commission is needed to complete the deal and a review is expected to be lengthy given the transaction will reduce the number of mobile operators in the UK from four to three. Hutchison group managing director Canning Fok expects completion some time during 2016.
