Citic Telecom boosted by Macau acquisition

Investors have reacted positively to Citic Telecom’s acquisition of Macau’s only full-service telecoms company, CTM.

Citic Telecom’s shares have gained 12.5% in Hong Kong since it announced the deal on Sunday, closing at HK$2.52 on Tuesday. It already owns a 20% stake in CTM and is paying $1.16 billion to buy Cable Wireless Communications’ 51% controlling stake and Portugal Telecom’s 28% holding. The Macau government owns the last 1% through Macau Post.

The deal values CTM at $1.47 billion, or 8.9 times its earnings before interest, taxes, depreciation and amortisation based on its last full financial year, when it reported revenue of $524 million, earnings...