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Li Ka-shing's CKI boosts buyout offer for Power Assets to US$12.4b

Cheung Kong Holdings Chairman Li Ka-shing smiles as he leaves a news conference on the companies' annual results in Hong Kong in this Feb 26, 2015 file photo.

[HONG KONG] Li Ka-shing's Cheung Kong Infrastructure Holdings Ltd (CKI) has sweetened an US$11.6 billion offer to buy the 61 per cent of Power Assets Holdings Ltd it doesn't already own in a rare concession by the Asian tycoon to independent investors unconvinced by his original plan.

CKI, the infrastructure arm of Mr Li's empire, said in a statement late on Wednesday that after feedback from a number of shareholders, it would raise the share-swap ratio in the offer by 2.5 per cent, hoisting the deal's value to US$12.4 billion. It is also raising a planned special cash dividend by 50 per cent.

Mr Li's CKI made the offer to holders in Hong Kong utility Power Assets last month as part of a restructuring of the richest man in Asia's business empire that is designed to give CKI access to Power Assets HK$67.8 billion (S$12.4 billion) cash pile. The combined entity would also have a wider mandate to invest in other infrastructure business such as toll roads and water supplies.

Some hedge fund managers and analysts had said that the original offer was not attractive, raising market hopes that the deal terms being improved.

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Under the new proposal, Power Assets shareholders would receive 1.066 CKI shares for every Power Assets share held, up from 1.04 CKI shares as proposed on Sept 8. They would also get a HK$7.50 per share cash dividend, up from HK$5 per share it planned earlier.

Terms of the new proposal would see CKI issue 1.39 billion new shares, taking the deal's value to HK$96 billion. A detailed timetable for the proposal will be outlined in a document issued to Power Assets and CKI shareholders on Oct 20, the statement said.