Skip to main content

MARK BLINCH/Reuters

The Canada Pension Plan Investment Board has become the largest shareholder in HKBN Ltd. after the Hong Kong-based Internet company completed an initial public offering Wednesday.

CPPIB announced Thursday it acquired 172 million shares of HKBN for $200-million (U.S.), giving it a 17-per-cent ownership interest in the company. HKBN's IPO was valued at $750-million.

HKBN's former controlling shareholder, private equity investor CVC Capital Partners, sold off most of its stake in the IPO, leaving it with just a 14.4-per-cent ownership interest. CVC previously owned 71 per cent of the company, and raised $625-million in the IPO sale.

HKBN is the second largest provider of residential broadband Internet services in Hong Kong by number of subscribers, and owns one of the city's largest fibre optic networks, reaching 2.1 million homes. The company said it has invested over $500-million to build its fibre optic network, and has a more than 50-per-cent share of the Hong Kong market for fibre high-speed residential broadband services. The company also operates more than 11,000 WiFi hotspots throughout the city.

CPPIB said HKBN fits the focus of its "relationship investments" group, which makes minority investments in publicly listed companies where CPPIB believes it can help the companies grow. CPPIB says its relationship investments group typically invests $100-million to $1-billion in its holdings, and works to develop relationships with boards and management of companies to assist with boosting long-term returns.

"As a cornerstone investor, we are delighted to begin a long-term partnership with HKBN's talented management team, and look forward to working together to generate growth for the company," said Scott Lawrence, CPPIB's head of relationship investments.