Henderson Land Development Co. (12), the Hong Kong builder controlled by billionaire Lee Shau-kee, agreed to buy HK$2.96 billion ($382 million) of shares from the founder and his family to broaden its income stream as property sales slow.
The property developer will buy shares in the city’s largest gas supplier Hong Kong & China Gas Co. (3), known as Towngas, Hong Kong Ferry Holdings Co., Henderson Investment Ltd. (97) and a hotel company, according to a filing to the city’s stock exchange yesterday.
Lee joins fellow billionaire Li Ka-shing in selling Hong Kong assets as China’s economy slows and property prices hover near record highs. Henderson, which already owns 42 percent of Towngas, said the purchase was an attractive investment opportunity to increase its share of a company with stable income.
“This may be a sign Lee is seeing limited opportunities in Hong Kong real estate for Henderson Land,” said Lee Wee Liat, a property analyst at BNP Paribas SA who advises investors to buy Henderson Land’s shares. “Hong Kong is now at the peak of the property cycle so he’s trying to help the company redeploy its investment.”
Henderson Land will buy 155.3 million shares, or a 1.6 percent stake, in Towngas for HK$18.57 each, or HK$2.88 billion, according to the filing yesterday.
Towngas “currently provides a substantial stable income to the group,” Henderson said in yesterday’s statement. “It allows an attractive investment opportunity to the group at a reasonable cost to increase its stake.”
Henderson agreed to buy 7 million shares in Hong Kong Ferry Holdings Co. (50) for HK$53.7 million, or HK$7.67 each, and 40.4 million shares in Henderson Investment Ltd. for HK$23.1 million, or 57.2 cents each, according to the statement.
Shares of Towngas fell 0.9 percent to HK$18.56 as of 12:32 p.m. in Hong Kong trading, while Henderson lost 0.2 percent to HK$48.50. Hong Kong Ferry gained 0.4 percent to HK$7.75 and Henderson Investment jumped 11 percent to 62 Hong Kong cents, the biggest gain in three years. The announcement came after stock trading ended yesterday.
The transactions are to simplify the structure of his companies, said BNP’s Lee. The billionaire may increase his stake in Henderson Land if the price is right, Radio Television Hong Kong said, citing Henderson’s Lee.
Li, Asia’s richest man, is seeking to raise as much as $5 billion by selling a stake in Power Assets Holdings Ltd. (6)’s Hong Kong electricity business to the public, two people with knowledge of the plan said last week.
Lee is 33 on the Bloomberg Billionaires Index with a net worth of $21.1 billion. He founded Henderson Land in 1973 and expanded it into one of the city’s biggest developers, mainly by buying dilapidated and old apartment buildings with multiple owners.
Henderson Land also said yesterday it will buy 5.05 million shares in Miramar Hotel & Investment Co. (71) for HK$51.1 million from Woo Po-shing. Woo is the father of Jackson Woo, an independent non-executive director at Henderson.
All of the purchases are scheduled to be completed no later than Oct. 15, Henderson said.
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