Li Ka-shing's new deal is latest effort to prop up CK Asset share price

Hong Kong

HONG Kong billionaire Li Ka-shing and his eldest son Victor Li are stepping up efforts to boost the stock of family business CK Asset Holdings, after HK$4.4 billion (S$762.7 million) of personal purchases of the company's shares failed to reverse slumping prices.

Mr Li Ka-shing's charity, the Li Ka Shing Foundation, is selling CK Asset's holding stakes in four companies in the UK and the Netherlands for HK$17 billion in stock.

To avoid diluting current shareholders, the company will buy back the same amount of shares from the market at an 8.4 per cent premium to the previous closing price.

By undertaking its first buyback in about 2½-years, CK Asset is hoping to boost a share price that has slumped more than 16 per cent since the start of 2019, compared with an 8 per cent rise in the benchmark Hang Seng Index.

CK Asset, the real-estate flagship of the Li family's CK Group, has seen its businesses including property development, aircraft leasing and pub operations hit hard after months of anti-Beijing protests in Hong Kong starting mid-2019 were followed by the coronavirus pandemic. CK Asset didn't respond to requests for comment.

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"One key message of this deal is that CKA (CK Asset) isn't abandoning" buybacks, Daiwa Capital Markets analyst Jonas Kan said in a note following the announcement.

"We will not be surprised if CKA turns more active in buybacks in the future, which shall be supportive for its share price."