Hutchison to sell one-third stake in UK mobile unit for $4.3 billion

Thu May 7, 2015 11:31pm EDT
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By Elzio Barreto

HONG KONG (Reuters) - Hutchison Whampoa Ltd 0013.HK said it plans to sell a one-third stake in its British mobile phone business for $4.3 billion to five investors - a move that will help the Hong Kong ports-to-telecoms group fund its boldest bet in Europe yet.

Hutchison, owned by billionaire Li Ka-shing, agreed in January to buy Telefonica's (TEF.MC: Quote) British mobile unit O2 for nearly $15.4 billion and merge it with its UK subsidiary to create the top mobile operator in the country.

Singapore's GIC Pte [GIC.UL] and the Canada Pension Plan Investment Board both said they will each pour 1.1 billion pounds ($1.7 billion) into the deal.

The other investors are the Abu Dhabi Investment Authority, Brazilian investment bank Grupo BTG Pactual SA (BBTG11.SA: Quote) and Caisse de depot et placement du Quebec, which manages public and private sector pension funds and insurance funds, Hutchison said in a securities filing. Their investments were not disclosed.

The deal value could grow by nearly $500 million if the O2 mobile phone business meets performance targets, Hutchison added.

The Hong Kong conglomerate took on a 6 billion pound bank loan to finance the purchase of the O2 UK business and had flagged that it was talking with private equity firms and other investors for a minority stake in the business.

Hutchison's shares were up 2.1 percent in early morning trade, compared with a 0.8 percent gain in the benchmark Hang Seng index .HSI.

(Additional reporting by Rujun Shen in Singapore; Editing by Edwina Gibbs)

The logo of Hutchison Whampoa Ltd is displayed at one of the company's office towers in Hong Kong August 1, 2013. REUTERS/Bobby Yip