Hutchison Whampoa Ltd. has offered HK$4.23 billion ($545 million) to take a phone unit private after the stock underperformed the Hong Kong benchmark index for three years, reveals Bloomberg.
According to Bloomberg, Hutchison Whampoa agreed to buy outstanding Hutchison telecommunications International Ltd. shares at HK$2.20 each, the parent said in a statement to the Hong Kong stock exchange today. That’s 33% higher than the stock’s last-traded price on Jan. 4 and exceeded estimates of analysts at Credit Suisse Group AG.
The delisting plan is part of Hutchison’s efforts to reorganize its phone units following the merger last year of a wireless division in Australia with the local arm of Vodafone Group Plc, notes Bloomberg.
“Hutchison is taking the view that the unit’s emerging- market assets have been undervalued, so they will now buy them back at a discount, and perhaps spin them off later when they become profitable,” Benjamin Lo, who rates the parent’s shares “neutral” at Nomura Holdings Inc. in Hong Kong, said before the announcement.
Bloomberg says billionare Li Ka-shing controls 67% of Hutchison Telecom’s shares through the 60.4% stake owned by Hutchison Whampoa, in addition to personal holdings.