Takeovers and Mergers Panel Decision in relation to Cable and Wireless HKT Limited (CWHKT)

On 10 May 2000, the Takeovers and Mergers Panel (Panel) ruled that Singapore Telecommunications Limited (SingTel) would not be required to issue an announcement in connection with its position regarding a possible bid by it for CWHKT. The full written decision of the Panel was issued today.

The background to this matter is that on 24 January 2000, CWHKT announced that Cable and Wireless plc (C&W) and SingTel had entered into discussions regarding a possible takeover offer by SingTel for CWHKT. On 11 and 12 February 2000, it was announced that Pacific Century Cyberworks’ (PCCW) also intended to propose a takeover offer by it for CWHKT. On 29 February 2000, SingTel announced that it had withdrawn from discussions with C&W in light of the progress of the proposed offer by PCCW. On 4 March 2000, SingTel announced that it would keep the matter under review and might reconsider its position if circumstances were to change.

On 26 April 2000 and 5 May 2000, there was widely disseminated press coverage that SingTel was planning a new takeover offer for CWHKT. On 26 and 27 April, there was unusual movement in the share prices of CWHKT in that for those two days the traded price of CWHKT shares was significantly higher than the price implied by the PCCW cash and share offer. The Takeovers Executive conducted immediate enquiries to ascertain whether an announcement should be issued by SingTel in order to clarify its current position. In view of the urgency of the matter and the interest of the investing public, the Executive referred this matter to the Panel.

On the basis of the evidence before it, the Panel ruled that there was no requirement under Rule 3.1(a) of the Takeovers Code for SingTel to a make an announcement as it did not appear that a new proposal had been formulated and was about to be put to C&W and the situation remained roughly unchanged from the time of its latest announcement made on 4 March. The Panel stressed that were the position to change and this were to become known to the market, an announcement by SingTel would be required.

The Panel also ruled that its decision and the reasons for it should not be published while CWHKT was subject to a general offer given the possible competitive situation which would arise were SingTel to make a revised proposal. For these reasons and since the decision did not require any action by SingTel or its advisers, it was decided that no public statement would be made regarding the Panel’s decision or deliberations until the full decision is published.