The Hong Kong billionaire’s flagship conglomerate, CK Hutchison Holdings Ltd, is pursuing three major moves: an initial public offering of its retail arm to raise at least US$2 billion ($2.59 billion) for its largest revenue contributor, a potential listing or partial sale of its global telecommunications operations, and talks to sell 43 port assets — representing the bulk of its global portfolio for more than US$19 billion in cash.
The Li family, which controls about 30% of CK Hutchison, believes selling and spinning off these businesses can unlock far greater value than the market currently assigns to them under the existing structure, a person familiar with the plans said, asking not to be identified because the matter is private. By separating the assets, they hope to fetch higher prices and narrow the steep discount at which the company trades relative to its net asset value.
Meanwhile, deliberations on the potential listing of retail arm AS Watson Group have been on-again, off-again since 2013, hampered by market volatility, while telecommunications mergers frequently encounter intense antitrust scrutiny.
CK Hutchison has been advised to move more cautiously with deals due to the delicate geopolitical environment, and to notify Chinese regulators on the potential retail listing because it involves operations in the country, one of the people familiar said.
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Still, the potential deals have helped reverse depressed market sentiment, narrowing steep trading discounts to net asset value and driving a 32% stock surge this year — outperforming the benchmark Hang Seng Index.
CK Hutchison did not respond to a request for comment.
While the Li family is divesting CK Hutchison, it’s been increasing its holdings in property arm CK Asset Holdings Ltd, now owning a stake of about 49%. The bulk of CK Asset’s projects are located in Hong Kong and mainland China. It also operates British brewer and pub chain Greene King.
Seperately, Jardine Matheson Holdings Ltd, a British-rooted conglomerate in Hong Kong, has been taking measures to modernise its management and accelerate divestments. Controlled for generations by the Keswick family, the 193-year-old group in recent years dismantled its long-criticised cross-shareholding structure and appointed several executives with private equity backgrounds to its top management. Its property unit, Hongkong Land Holdings Ltd, aims to raise US$10 billion over the next decade through asset disposals and spin-offs.
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