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(Bloomberg) -- PCCW Ltd., the telecommunications group controlled by Hong Kong tycoon Richard Li, is in advanced talks to sell a significant minority stake in its fiber business to China Merchants Group Ltd., according to people familiar with the matter.

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PCCW is close to selling 40% of its fiber unit to the Chinese state-owned conglomerate for $850 million to $900 million, the people said, asking not to be identified because the discussions are private. PCCW and China Merchants are finalizing details and an announcement could be made as soon as the coming weeks, the people said.

Financing has been lined up for the deal, which may be done via private equity unit China Merchants Capital, the people said. The stake sale would help PCCW raise cash and expand the fiber business, they said.

PCCW’s American Depositary Receipts rose as much as 5.3% following the Bloomberg News report on the possible sale, the biggest jump since March 5. PCCW’s Hong Kong-listed shares rose as much as 1.8% when trading began Wednesday, also the biggest gain in two months. The Hang Seng Index was little changed.

Talks are ongoing and could still face delays or collapse, the people said.

A representative for PCCW declined to comment. China Merchants Capital didn’t respond to a request for comment.

China Merchants has been considering bidding for a stake in the fiber business after talks between PCCW and Abu Dhabi’s sovereign wealth fund for the assets fell apart, Bloomberg News reported in March.

China Merchants traces its roots back to 1872 and has businesses ranging from ports, transport and finance to property and health care.

(Updates with share-price moves in fourth paragraph.)

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