Kuok raises his offer for property arm.

Posted On Monday, 05 May 2003 02:00 Published by eProp Commercial Property News
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Kerry Holdings, the group controlled by Malaysian billionaire Robert Kuok, has raised the price of the buy-out offer for its Hong Kong-listed property unit in an effort to placate minority shareholder objections to the proposed deal.


David WebbOn Friday, the company lifted the price of its planned repurchase of Kerry Properties to HK$9.50 per share from HK$8.50. The increased price lifted the value of the deal to HK$3.6bn (US$458m) and was designed to make the deal "more attractive", it said.

Kerry Holdings said the new price was a 55% premium over the average closing price of Kerry Properties' shares in the five days prior to the announcement of the buy-out in early April.

But investors countered that it still represented a steep discount to the unit's net asset value.

The offer for Kerry Properties is the latest in a string of similar transactions by Hong Kong conglomerates that shareholder activists and fund managers have criticised as being priced at heavy discounts to the target companies' net assets.

The territory's tycoons are seeking to take advantage of a 65 per cent fall in property prices over the past five years to buy back assets cheaply and to reorganise unwieldy group structures.

David Webb, editor of webb-site.com, a corporate governance activist, said Kerry Holdings' revised offer still represented a 47% discount to Kerry Properties' net asset value at the end of last year of HK$17.94 per share.

He also said the offer was poor compared with the successful privatisation of another property company, Realty Development, in February, which was done at a discount of 18.8%.

It was also lower than the 38% discount offered in the attempted repurchase of Henderson Investment, another real estate developer.

That deal was scuppered by a shareholder rebellion led by Webb and other minority investors.

"Carry on bidding, Mr Kuok - you will have to do much better to clinch the deal," said Webb, who added that he held shares in the company.

However, Adrian Ngan, analyst with BNP Paribas Peregrine in Hong Kong, said that given the negative market conditions, the new deal price might suit shorter-term investors.

"Given the current market conditions and the nature of Kerry's businesses and the trading patterns, I think HK$9.50 could be quite a good exit price," Ngan said.

Kerry Properties' shares, which had been suspended from trading last Wednesday, gained 10% to HK$9.20 after they resumed trading on Friday.

Financial Times

Publisher: Financial Times
Source: Financial Times

Last modified on Tuesday, 06 May 2014 09:11

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