ING Barings has been mandated to launch the IPO of Pacific Broadband in a deal which is expected to raise HK$1.5 billion ($200 million). Pacific Broadband is Taiwan’s third biggest cable TV operator and a subsidiary of the Pacific Construction Group, one of the Island Republic's largest property companies. It has 600,000 subscribers.
But what is the logic behind listing the company in Hong Kong rather than its own domestic market? On the one hand, Taiwan’s equity markets have pounded all things ‘telecom,’ or more to the point the country's only listed entity, Chunghwa Telecom. Would a cable TV company suffer a similar taint? In addition, most of the deals coming out of Taiwan have recently been convertible bonds, which says a lot about the difficulties of doing straight equity offerings anywhere in Asia.
But there is another reason. Apparently, the process of listing is a much more long and drawn out one in Taipei. The speed of getting a Hong Kong listing is one of the chief attractions of doing the deal in Hong Kong.
Another advantage is that the company will be the only pure-play cable TV firm listed in the Territory. Hong Kong’s dominant cable operator, Wharf Cable, is part of the listed conglomerate Wharf, which is in several businesses, meaning investors are not buying a pure-cable play.
