Stuart Corner
Monday, 15 January 2007 08:51
IT Industry -
Strategy
Page 1 of 2
The parent company of one of the largest operators of submarine cable networks in Asia has launched a takeover bid for the one of the region's largest ISPs: a move that, if successful would create a unique combination of a massive regional cable network and an ISP with a presence in several major regional nations.
The bid has been launched by Connect Holdings Ltd, a company owned by a global investor group which includes Ashmore Investment Management Limited, Spinnaker Capital Limited and Clearwater Capital Partners and which
bought submarine cable operator Asia Netcom from China Netcom in August 2006. Connect also owns another Asian regional submarine cable network, C2C Pte Ltd, originally a Singapore Telecom subsidiary.
Connect is offering $US10 per share for PacNet, a price which represents a premium of approximately 9.8 percent over the closing price of PacNet shares immediately prior to announcement of the bid and a premium of 14.2 percent over the average closing price in the month preceding the announcement.
Separately, Connect has reached agreement with PacNet's largest shareholder Vantage Corporation to buy 2,250,000 PacNet shares which will give it a 29.9 percent stake in PacNet, and Vantage will tender its remaining 1,63 million PacNet shares into the offer.
Asia Netcom owns a fibre-optic submarine cable network spanning 19,500 kms between Hong Kong, China, Korea, Japan, Taiwan, the Philippines and Singapore. It comprises four fibre pairs configured into four fully protected ring networks. Each fibre is able to carry 64 wavelengths, each with 10Gbps of data, giving a total design capacity of 2.56tbps.
The company provides a comprehensive portfolio of city-to-city connectivity, data communications and IP-based services to enterprise, ISP and carrier customers in Asia and the rest of the world. The C2C network comprises three rings linking Hong Kong, Singapore, Taiwan, China, South Korea, the Philippines and Japan.
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