PCCW has decided to abandon its privatisation plan by letting the buyback offer lapse. On the other hand, Richard Li has told Bloomberg that he hasn’t decided whether he would appeal the ruling made by the Court of Appeal. As a result, PCCW share price dropped 13% today.
On another note, PCCW has declared a special dividend of HKD 1.3 per share. This is good news for minority shareholders as they are actually getting something at the end.
A very dramatic ending. The Appeal Court has blocked the buyout by Richard Li. It seemed like the judges have turned 180 degrees against Richard Li and favored the minority shareholders and the SEC during the course of the appeal. We will know soon whether Richard Li will appeal the case or not.
What will minority shareholders gain actually? Share price will probably drop quite a lot when trading is resumed in the next few days. And I believe the share price will have big upward resistance because of all the negative publicity it has got. And if Richard Li appeals, then this case can drag on for a long time and this will again create upward resistance on the stock. It is a lose-lose situation for Richard Li and minority shareholders.
In the court hearing yesterday morning (Saturday morning), there were 8 retail investors testifying against PCCW; however, the points they made seem to be irrelevant to the privatisation case. Most of them have held PCCW for over ten years and they have suffered big losses and they have expressed their mistrust or contempt against Richard Li for bringing down PCCW and for PCCW’s big drop in share price.
Fair enough, they have the right to express their opinions. But how is their testimonial relevant to the case? Sure, PCCW share price suffered big drop during the tech bust in 2000 and 2001 and Richard Li was, very likely, responsible for the drop. But then, do they think that PCCW share price would go back up to its max price in 2000 if the privatisation was disallowed? No way! What could they achieve by opposing to the privatisation? Nothing. PCCW share price would probably drop further if PCCW was rejected by the court at the end.
Wake up, people. You should move on. When you bought PCCW, you believed in their management and when they failed, that means that you have made a bad investment decision. Then you should move on and find another company that you believe in. Holding on PCCW for 10 years and hoping that it would bounce back to the level you bought ten years ago just don’t make sense to rational investors.
Mainly because PCCW stressed that timing is in essence here and the takeover can be derailed if the takeover didn’t follow the original time frame, the court is working over the weekend this time! The court will re-convene Saturday (18 April 2009) morning. However, due to this constraint in time, the new judge, Anthony Rogers, is not accepting any new evidence from the SFC. With no new evidence being admitted, it basically means that the minority shareholders and the SFC will need to convince Judge Rogers that previous interpretation made by Judge Kwan was wrong. I would think that it is quite difficult given judges probably won’t make a fool of themselves by having two completely different conclusions based on the same set of evidence.
I have a feeling that the appeal will fail and the PCCW privatisation will be allowed again by the court tomorrow morning (or early next week).
The High Court of Hong Kong has approved the PCCW privatisation transaction. Judge Kwan found that the alleged vote rigging is not substantiated by evidence.
On the other hand, the court has allowed the SFC to appeal the ruling. In essence, the PCCW privatisation probably won’t materialise for at least a short while.
The court will announce its decision on PCCW privatisation next Monday. Media has been wondering who the secret persons are in paying for the lawyers representing the minority shareholders. It has been estimated that the legal cost for two day court case can easily be a few million hong kong dollar, given the high caliber of the legal teams involved.
The secret persons probably have some personal grudge on Richard Li? According to Apple Daily, the secret person and the minority shareholders are linked by Long Hair Leung Kwok Hung. Furthermore, it reveals that one of the secret persons is Mr. Chong Wing Cheung, a mentor of “Ah Lek” Chan Pak Cheung. And on radio tonight, some people thought that the boss of the Emperor Group, Yeung Sau Sing, may be one of the secret persons. Maybe the Isabella Leong-Richard Li saga still pisses Mr. Yeung off.
