Hutchison may sell stake in UK phone firm Three

CK Hutchison Holdings, the ports-to-telecoms arm of Asia’s richest man Li Ka-shing, said it may sell a stake in its UK phone carrier Three to help fund its proposed $15bn takeover of rival operator O2 UK.
In an exchange filing yesterday, CK Hutchison said it was considering selling a stake in Three to a “new investor” to reduce the new cash investment required to purchase O2, without naming the potential buyer.
CK Hutchison agreed in January last year to buy Telefonica’s British mobile unit O2 for up to £10.25bn but the deal has run into regulatory hurdles. To overcome that Hutchison has offered some concessions.
Among them Hutchison has offered to sell 30% of the merged network’s capacity, a person familiar with the matter said yesterday.
Hutchison said if the stake sale goes through, the company would continue to operate Three and O2 as separate businesses. This would be done in part to achieve regulatory approvals among other things, it added.
The disclosure of the potential stake sale came as the company reported a net profit of HK$31.17bn ($4.02bn) for 2015, a year in which it grappled with weak euro growth and in which sluggish oil prices weighed on its energy business.
CK Hutchison was created in a group restructuring announced early last year that segregated its property assets and increased exposure to overseas markets.
The result was in line with an average estimate for net profit of HK$31.03bn, according to 10 analysts polled by Reuters. Turnover stood at HK$316.32bn.
A fall in oil prices hurt its energy assets, but its Husky Energy unit was able to post a smaller-than-expected quarterly loss for the fourth quarter as cost cuts helped cushion the impact of slumping oil prices.
Last week, CK Hutchison said it had “fruitful” talks with EU regulators at a hearing aimed at dispelling antitrust concerns over its plan to become the top UK mobile operator by buying Telefonica’s O2 unit, which is crucial for Hutchison to expand its telecoms footprint across Europe.
Its infrastructure arm, Cheung Kong Infrastructure Holdings Ltd, saw its 2015 profit fall 65% without one- off gains from asset sales notched in the previous year.