China Network Communications Group Corp hinted that talks over taking a major stake in Hong Kong fixed-line provider PCCW could end without a deal. Its spin-off China Nedtcom plans a US$1.2bn listing in Hong Kong and New York. China Netcom Group President Zhang Chunjiang, who is also chairman of the company's listing vehicle, China Netcom Group Corp (Hong Kong), declined to go into details, but reports suggest there is a huge gap between what PCCW and Netcom contend the stake is worth. Sources quoted in one report suggest it could be as much as US$1.5bn. Fund managers looking at Netcom's prospective IPO fear the already heavily geared parent company would need to use its listed arm to pay for the acquisition.