I Squared Capital Is Said to Verge on Buyout Offer for HKBN

(Bloomberg) — I Squared Capital is edging closer to a buyout offer for HKBN Ltd., people familiar with the situation said, potentially setting up a bidding war with China Mobile Ltd. for the Hong Kong-listed broadband provider.

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Having started due diligence on HKBN in December, I Squared is now evaluating potential synergies of a transaction to help it decide the price of a new offer, according to the people, who asked not to be identified discussing a private matter. The US infrastructure-focused fund may table an offer as soon as the coming weeks, the people said.

Deliberations are ongoing and I Squared could still decide against making a bid, the people said. I Squared declined to comment, while HKBN didn’t immediately respond to a request seeking comment.

HKBN shares jumped as much as 6.4% Tuesday afternoon in Hong Kong following the Bloomberg News report on the latest developments. That was the biggest intraday jump since Dec. 3.

I Squared’s potential approach would follow a bid by China Mobile in early December, when the state-backed firm said it planned to make a general offer to buy all of HKBN’s shares at HK$5.23 each, valuing it at about $882 million.

Bloomberg News has reported that I Squared may offer HK$5 to HK$6 a share. The investment firm started the due diligence process after submitting a preliminary, non-binding indication of interest for an acquisition via its portfolio company HGC Global Communications Ltd. on Dec. 2. I Squared has previously tried to buy HKBN, Bloomberg reported in 2023.

HKBN’s shares rose more than 40% from the start of November through Monday. The company has a market value of about HK$6.9 billion ($890 million).

–With assistance from Vinicy Chan.

(Updates to reflect HKBN share price reaction in fourth and final paragraphs.)

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