China Mobile’s USD 996M Bid for HKBN Faces Uncertainty as Competition Reopens

China Mobile Ltd. $600941.SS, the state-owned telecommunications giant, is pursuing a strategic acquisition of Hong Kong Broadband Network $1310.HK in a deal valued at HKD 7.8 billion (approximately USD 996 million). The offer, initially seen as nearing completion, now faces renewed complexity as HKBN signals its openness to alternative bids to maximize shareholder returns.

The proposed acquisition is part of China Mobile’s broader effort to expand its fixed-line broadband and enterprise services footprint in Hong Kong, a mature but competitive telecom market. The development comes amid an ongoing wave of M&A activity in Asia’s telecom sector, driven by digital infrastructure investments, 5G expansion, and intensifying demand for cloud-based connectivity.

Deal in Flux as HKBN Invites More Offers

In December, China Mobile tabled an offer of HKD 5.23 per share for HKBN. The bid came shortly after I Squared Capital, a U.S.-based private equity firm, withdrew from negotiations. At that point, market observers viewed the acquisition as all but finalized.

However, on Monday, HKBN’s CEO publicly stated that the company remains open to additional suitors, describing the current proposal as “not good enough.” The comment effectively reopens the competitive bidding process, introducing fresh uncertainty into a deal previously thought to be near closure.

The revised stance could attract interest from other regional or global players, including infrastructure-focused funds or rival telecom firms seeking scale in Hong Kong. For China Mobile, this adds pressure to either improve its offer or risk losing strategic positioning in the local fixed-broadband segment.

Key Facts

• Offer value: HKD 7.8 billion (USD 996 million) by China Mobile.

• Bid price: HKD 5.23 per share for HKBN.

• Original competition: I Squared Capital exited the bidding in May.

• HKBN’s CEO: Current offer “not good enough,” company open to better terms.

• Objective: Expand China Mobile’s broadband and enterprise services in Hong Kong.

Market Response and Strategic Implications

Following the CEO’s remarks, HKBN’s share price gained modest ground on expectations of a potential bidding war. Meanwhile, China Mobile’s stock traded flat, with investors weighing the cost of a sweetened offer against long-term synergy potential.

From a strategic perspective, China Mobile’s push for HKBN reflects growing competition among Asian telecoms to secure last-mile connectivity assets, particularly in high-density urban markets like Hong Kong. With telcos transitioning from traditional voice and data offerings to platform-based B2B solutions, controlling fixed broadband infrastructure has become increasingly valuable.

Financial analysts have noted that while China Mobile's current offer reflects a 12% premium to HKBN’s recent trading levels, it may not be sufficient in light of the company’s underlying asset base, existing cash flows, and growth potential in managed services.

Key Points

1. China Mobile’s HKD 5.23/share bid has not secured full shareholder support at HKBN.

2. I Squared Capital’s exit previously cleared the path for a China Mobile acquisition.

3. HKBN now welcomes new bidders, increasing deal complexity.

4. Market reaction suggests a higher counteroffer may be necessary.

5. Strategic control of broadband assets remains the central driver for consolidation.

Deal Outcome Hinges on Valuation and Strategic Fit

While China Mobile remains the frontrunner in acquiring HKBN, the situation has evolved from a straightforward acquisition to a competitive bidding scenario. HKBN’s willingness to entertain higher offers creates renewed tension around deal valuation, shareholder interests, and strategic alignment.

As telecoms in Asia continue to consolidate, control over urban broadband networks like those operated by HKBN will likely command a premium. Whether China Mobile chooses to raise its offer or withdraw will depend on both regulatory feasibility and its longer-term objectives for cross-border digital integration in the Greater Bay Area.