HKBN Ltd

Hi Junne, It isn’t a good offer price, especially HIBOR has dropped quite a bit. HKBN is poised for a strong recovery in dividend per share, just from interest saving alone. The share price recovery is being capped by the offer price of HKD5.075. Right now, HKBN trades at EV/EBITDA of 7.7 versus HKT which trades at 10.8x. So there is a discount gap of around 30%. So we are looking at fair valuation of around HKD7.00 or more. So far, China Mobile has around 42.23% (including Canada Pension) stake. The co-founder (2% stake) and GIC (6.3%) have no indication that they would take up the offer. So I assume they won’t accept the current offer price. But if most of the shareholders (>90%) accepted the offer, then China Mobile have the right to force acquire all the remaining shares. Else, HKBN should stay listed if there is remaining free float of 25%. The latest time and date for acceptance of Offer is 3 September 2025, 4pm.

Rusmin, below is the announcement and what’s next? An announcement from HKBN ( ) is now available.                 China Mobile Hong Kong Company Limited, through its financial advisor China International Capital Corporation Hong Kong Securities Limited, has made a voluntary general conditional cash offer to acquire all issued shares of HKBN Ltd. that it does not already own. The offer has become unconditional as China Mobile has received valid acceptances representing approximately 40.80% of all issued shares, bringing its total holding to about 70.70%. The offer remains open for acceptance until September 17, 2025.

As of today, China Mobile has successfully acquired 70.7%. This means that HKBN will stay listed since it fulfils free float requirement of at least 25% in the HKEX. Note that remaining investors can still choose to accept the offer until 4 p.m. on 17 Sep 2025. By then, I expect more shareholders to accept the offer and their holdings in HKBN will go up (the final percentage is anyone's guess).HKBN stands to benefit from lower interest rate moving forward, so I expect their fcf and dividend to grow moving forward. This is provided that HKBN stays listed and maintains sufficient free float. There is also another risk to consider because new controlling shareholder China Mobile may choose not to increase the dividend and prioritise the debt payment instead. I believe there is no good reason for them to do so since interest rate in HK has fallen by quite a bit. Even if they focus on paying down the debt, it is still good for HKBN in the long-run. But if you have other better opportunities or do not wish to take on the risk that the company could suspended where HKBN loses the free float after last date of offer acceptance, then it makes sense to sell and move on because it may awhile to restore the free float. If you're betting on the further sweetening of deal by China Mobile to increase the offer price which is a 50/50 chance, then staying invested in HKBN is the only option.

Hi Rusmin,   Just Found out that HKBN share price spiked up recently as high at HK$9+ and now is about H$D7.7. I think my average purchaser price is about HK$8+. Would like to know if you are still holding or have exited? If hold on, what would be the reasons to do so?  TIA