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PCCW has put a price tag of about HK$700 million on its yellow pages unit, according to a telecommunications industry source, as the company speeds up its assets disposal programme.

The company, controlled by Richard Li Tzar-kai, said yesterday that it had received expressions of interest in the unit but no decision had been made on whether to sell.

An industry source who claimed to have been approached by a PCCW adviser said the telecoms company was asking about HK$700 million for the business, equivalent to about 14 times its historic price-earnings ratio.

'The price tag seems too high for me, considering that it is a business with declining revenue and profit,' the source said.

The directory unit made about US$13 million in earnings before interest, tax, depreciation and amortisation (ebitda) on revenue of US$38 million last year. PCCW is believed to have appointed Goldman Sachs to arrange the sale.

Several overseas telecom companies have recently disposed of their yellow pages businesses.

Last month, United States firm Qwest Communications sold its directory business for US$7 billion, or at an ebitda multiple of between 7.5 and 7.8, according to Credit Suisse First Boston.

The industry source said that the PCCW sale would include its 37.65 per cent stake in China Unicom Yellow Pages, which it paid US$25 million for in November, 2000.

Duan Huang, chief operating officer of China Unicom Yellow Pages, said the company was unaware of any intention by PCCW to dispose its interest in the joint venture.



PCCW considers yellow pages sale