Li Ka-shing’s Hutchison may bid for EE or O2 in UK mobile market

Hutchison Whampoa, the flagship conglomerate of Asia's richest tycoon Li Ka-shing, could be poised to make its biggest mobile telecommunications investment in Europe as speculation swirled about its reported bid for EE or Telefonica's O2 in Britain.

The Hong Kong blue chip, which has interests from ports and retail to property and telecommunications, is working on a deal with an advisory boutique, according to a Reuters report yesterday that cited sources familiar with the matter.

Shares of Hutchison dropped 1.72 per cent yesterday to close at HK$97.20 following reports that the company planned to acquire a mobile telecommunications firm in Britain. The Hang Seng Index lost 0.07 per cent.

Li's overseas investments have repeatedly stoked talk that he is divesting from Hong Kong. He has repeatedly denied the allegation. Hutchison declined to comment.

If Hutchison's bid proceeds, it would be a major coup for the firm's growing European telecommunications operations known as "3 Group Europe". Its mobile services in Britain, Ireland, Italy, Sweden, Denmark and Austria had a total subscriber base of 26.9 million at the end of June.

"Hutchison has long been interested in the opportunities from the consolidation of Europe's telecommunications industry. So this reported bid for either EE or O2 is consistent with its strategy over the past several years," said Daiwa analyst Jonas Kan.

"So far, Hutchison has not made a really large-scale investment in Europe. This could be a very sizeable project, but the company has the financial resources to do it."