Li Ka-shing's CKI to buy out Hong Kong utility in US$11.6b all-share deal

[HONG KONG] Cheung Kong Infrastructure Holdings Ltd (CKI), part of billionaire Li Ka-shing's business empire, offered on Tuesday to buy all the shares it doesn't already own in Hong Kong utility Power Assets Holdings Ltd in an all-stock transaction valued at US$11.6 billion.

CKI will issue 1.36 billion new shares to buy the 61 per cent of Power Assets it doesn't already own, the companies said in a joint securities filing. At Tuesday's closing price of HK$66.15 per CKI share, the deal would be valued at HK$89.7 billion (US$11.6 billion).

The transaction will help CKI take advantage of the"significant cash balance" of Power Assets, which stood at HK$67.8 billion at the end of June, to improve its balance sheet and help in future expansion, the company said.

The move would dilute the stake held in CKI by Li's CK Hutchison Holdings Ltd to 49.2 per cent from 75.7 per cent before the deal.

HSBC was hired as financial adviser to CKI, while Anglo Chinese Corporate Finance Ltd was hired as independent financial adviser to CKI's board.

REUTERS