Hong Kong phone company PCCW today said it was abandoning its courtship of Cable & Wireless (C&W) and apologised for any market confusion its interest in the British carrier had caused.
Many investors in PCCW, headed by tycoon Mr Richard Li, had questioned why a firm with net debt of $4.2 billion (€6.6 billion) would want to make such sizeable transaction.
"The company has concluded that it is not in the company's interests for the continuing uncertainty regarding any possible takeover offer for C&W to continue," PCCW wrote in a letter distributed by the Hong Kong stock exchange.
PCCW also said it had "never had any discussion" towards a deal involving Japan Telecom Holdings Co, contradicting media reports that it had held talks for that firm's fixed-line assets.
PCCW said it has requested that its shares, which were suspended before the start of trade on Monday pending the announcement, resume trade tomorrow morning.
Shares in C&W rose 1.54 per cent on early morning trade to 65.75 pence sterling.
PCCW's interest in C&W, which emerged last week, caught investors in both Hong Kong and London by surprise. PCCW confirmed in its statement that its preliminary approach to C&W, which the British firm rebuffed on January 27th, was made jointly with private equity firm Texas Pacific Group.
PCCW said its decision to walk away from C&W was intended to put an end to the confusion sown by its interest in C&W, given the fact that C&W had already rejected its earlier advance.
