Australia's Spike Networks in joint venture with HK firm

Sydney, Dec 21 (Asia Pulse) - Spike Networks Ltd, an Australian technology and e-commerce company has formed a joint venture with the Hong Kong listed company Pacific Century CyberWorks Ltd (PCCW) to boost the provision of Internet services in Japan and the Asia-Pacific.

The deal, which requires completion of due diligence and regulatory and shareholder approvals, will give Spike a 70 per cent stake in the venture with PCCW holding the remaining 30 per cent. Spike will also value its global service business at an agreed value of $A54.5 million and PCCW will value its contribution to the joint venture at an agreed value of $A23.3 million.

Spike said the deal, to provide a full range of Internet services including website development and management, intranet and extranet development, will operate globally building initially on Spike's operations in the Asia-Pacific region. "(It) will expand into the Asia-Pacific region combining Spike's existing activities with the capital positioning of PCCW." The agreement follows Spike's move earlier this year to boost its presence in the Japanese e-commerce market, signing a deal with Japanese advertising firm I&S/BBDO to provide Internet services to Japanese clients. PCCW also aims to be the pre-eminent broadband Internet provider in Asia and currently has a market capital valued at $US11.03 billion, and is the largest Internet company in the Asia-Pacific outside Japan, Spike said.

In addition to the joint venture, PCCW has been granted an option to increase its equity in the joint venture to 50 per cent for a consideration of $A31.2 million, Spike said. This will involve PCCW taking a five per cent interest in Spike through the placement of 4,661,576 shares at a price of $1.26 per share and an option to acquire an additional ten per cent the share capital of Spike on a fully diluted basis at a strike price of $1.45 per share - equivalent to Spike's issue price on its initial public offer.

The option will be exercisable at any time within 12 month of the above allotment, Spike said. At 1248 AEDT Spike shares were up 12 cents to $1.52.