TPG, MBK pay high price for Wharf T&T

The private equity firms beat strategic buyer HKBN, which had penciled in extensive synergies.

Buyout firms TPG Capital and MBK Partners’ joint acquisition of Wharf TT for HK$9.5 billion $1.22 billion looks pricey, especially since the telecoms firm will now face a fierce local competitor in HKBN, according to industry sources.

The funds said on Wednesday they are acquiring Hong Kong’s second-largest fixed line operator from real estate conglomerate The Wharf Holdings.

TPG and MBK Partners are paying about 11.5 times earnings before interest, taxes, depreciation and amortisation and have layered on an aggressive leverage multiple of around seven times, which could equate to returns in the low teens, according to a source familiar with the deal....

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