Hutchison Whampoa will delay the long awaited IPO of its Italian 3G mobile phone unit, citing weak market conditions for European telecom stocks, an Associated Press report said.
The report quoted Canning Fok, Hutchison Group managing director and 3 Italia chairman as saying that a valuation of 7 billion euros ($8.4 billion) for the IPO of 3 Italia SpA is "too low," and to push through with the listing would be a disservice to shareholders.
The report also quoted Fok as saying that the firm had instead opted to sell 10% of 3 Italia to investment bank Goldman Sachs for 420 million euros ($498 million) through a private placement.
The report said the executive agreed to the deal with the bank, one of the planned listing's sponsors, because its valuation price of 9 billion euros ($10.7 billion) for 3 Italia was "fair."
The valuation was calculated based on an estimated debt of 4.8 billion euros ($5.7 billion) by the end of 2006 for the company, the report said.
The IPO decision came after Hutchison secured the approval of Italy's securities watchdog Consob to list its Italian unit.