Shares in SK Telecom surged as much as 8 percent on Wednesday on market talk South Korea's top mobile phone operator might be bidding for broadband operator hanarotelecom,
spreading its reach.
Hanarotelecom executives told an investor meeting on Tuesday local strategic investors were in a race for the company. Analysts said on Wednesday that market players were speculating SK Telecom was among the bidders.
"Market speculation is that SK Telecom is involved in the race somehow, either separately or teaming up with Macquarie Bank," said Yang Jong-in, an analyst at Korea Investment & Securities.
A source familiar with the situation had told Reuters recently that Australia's Macquarie Bank had submitted the highest bid for hanarotelecom.
Shares in hanarotelecom spiked as much as 10 percent last week on a media report last week said that Macquarie was close to buying a 40 percent stake for $1.2 billion.
Officials at SK Telecom and hanarotelecom declined to comment, as did a Macquarie spokesman in Seoul.
"If SK Telecom buys hanarotelecom, it will leap to a telecoms giant to be able to offer every service ranging from mobile services to broadband and landline services. It would be able to bundle the services and cut marketing costs," said Choi Nam-gon, an analyst at Tongyang Investment Bank.
"I think the rumor that SK Telecom might be bidding for hanarotelecom is the biggest factor behind the stock's gains today."
Hanarotelecom shares also soared 8.71 percent to 8,860 won in the afternoon session, after earlier gaining more than 10 percent. SK Telecom was 6.95 percent up at 222,000 won.