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(Bloomberg) -- HKBN Ltd. shares jumped after China Mobile Ltd. made a takeover bid that values the Hong Kong broadband provider at about HK$6.86 billion ($882 million), pushing forward with a formal offer in an emerging bidding war.

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The state-backed carrier is planning to make a general offer to buy all of HKBN’s shares for HK$5.23 each in cash, it said in an exchange filing Monday. That represents a 41% premium to HKBN’s undisturbed share price. Bloomberg News first reported last month that China Mobile was in talks on a potential acquisition.

HKBN shares rose as much as 7.6% in Hong Kong on Tuesday, reaching the highest intraday level since May 2023. China Mobile’s stock was down as much as 0.9%.

China Mobile has received irrevocable undertakings from Canada Pension Plan Investment Board and an affiliate of TPG Inc., which own a combined 25% of HKBN, to accept the bid for their entire shareholdings. The Chinese firm plans to help HKBN strengthen its financial position by lowering its interest expenses after the deal, according to the statement.

The move by China Mobile to push ahead with a formal takeover bid and secure commitments from some of HKBN’s biggest shareholders gives it a leg up over rival suitor I Squared Capital. The potential takeover of the Internet provider would help China Mobile, which already offers wireless services in Hong Kong, widen its range of services to its customers and comes at a time when mainland Chinese enterprises are deepening their footprint in the city.

China Mobile said the total cost of the transaction could rise to as high as HK$7.8 billion after the potential purchase of restricted share units and vendor loan notes are taken into account. The bid is dependent on China Mobile being satisfied that the takeover won’t face opposition from Hong Kong competition authorities, as well as completing necessary filings with Chinese regulators, according to the statement. China Mobile said its objective isn’t to take HKBN private and it would be open to keeping the company publicly traded.

China International Capital Corp. is advising China Mobile on the deal.

HKBN said earlier Monday that it has also received a preliminary non-binding indication of interest from infrastructure investor I Squared, which is seeking to do a deal through its portfolio company HGC Global Communications Ltd. HKBN is still negotiating terms of the proposal with I Squared, including the potential price, according to the statement, which confirmed an earlier Bloomberg News report.