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It is rumored that billionaire Li Ka-shing is considering the sale of a portion of the port operations held by Hutchison Whampoa to a consortium of state-owned firms, while increasing efforts to acquire European assets.
Hutchison and four mainland companies had been in talks since mid-2014 over a 40 percent stake in Hutchison Port Holdings valued up to $20 billion, according to an inside source. The companies include China Merchants Holdings (International), Cosco Pacific, China Shipping Terminal Development and State Development & Investment Corp.
The negotiations lost steam recently once Li revealed the restructuring of Cheung Kong (Holdings) and Hutchison last month in a move that led to his conglomerate registering in the Cayman Islands. That move sparked worries that that he was divesting out of Hong Kong and the mainland.
"There is nothing at this moment that we should report to the market. If and when there is any
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transaction which requires an announcement according to the Hong Kong listing rules, we will duly comply," China Merchants said in a statement.
The prospective agreement also hit a snag when buyers regarded Li's asking price as "excessively overvalued," according to the source. "It is like a replay of the ParknShop [deal]. The buyers would only end up massively overpaying for assets with no essential upside and no managerial control," the source said.
When contacted by the South China Morning Post about the prospective deal, Hutchison said: "The market rumor is unfounded."
Hutchison holds an 80 per cent stake in HPH, the world's largest container port operator by throughput with a foothold in 52 ports in 26 countries.
For more of the South China Morning Post story: www.scmp.com
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