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International wealth funds pursue merged network operators Three and O2

International sovereign wealth funds from China, Singapore and the Middle East are pursuing a stake in the company set o become the UK’s largest mobile phone operator.

Sky News has reported that state-backed investors have approached advisers to Hutchison Whampoa, the Hong Kong-based conglomerate, about acquiring shares in a merged O2 and Three.

The combined group, which will be created by Hutchison’s purchase of O2 for £10.25 billion, is expected to have an enterprise value of approximately £15 billion.

It would carry debts of roughly £6 billion, and Hutchison has signalled that it will sell about 30% of the new company - worth in the region of £3 billion - to institutional investors.

Sources said on Saturday that the Hong Kong-based company had already received a string of enquiries from potential buyers of shares.

The discussions are at an early stage, but are said to include approaches from the Government Investment Corporation of Singapore and a number of Canadian pension funds.

Hutchison Whampoa won a period of exclusivity to negotiate a takeover of O2 with Telefonica, its Spanish parent, earlier this month, with talks said to be progressing well.

This was posted in Bdaily's Members' News section by Clare Burnett .