Hong Kong’s CK Asset, the property arm of retired billionaire Li Ka-shing, said on Thursday it will acquire interests in four European utilities from Li Ka Shing Foundation for HK$17 billion ($2.19 billion).
The developer will pay Li Ka Shing Foundation by issuing around 333 million new shares at HK$51 per share.
To minimise the share dilution impact, CK Asset said it plans to buy back the same amount and price the shares at HK$51 per share.
HK$51 is 8.4% higher than Thursday’s closing price.
The deal will give CK Asset a 20% stake in UK Power Networks, and increase its interests in the UK’s Northumbrian Water, Wales & West Utilities and Dutch firm Enviro Energy.
The company said it will provide stable recurrent cash flow and allow the company to acquire a sizeable and high quality portfolio of assets.
“The deal is positive to the share price and create value for shareholders,” Chairman Victor Li told an earnings conference.
It said it will pay full year dividends of more than HK$7.5 billion in 2021 and 2022, including a guaranteed cash distribution from the four assets of HK$910 million a year, representing a cash yield of more than 5.35%.
CK Asset on Thursday reported a 32.5% fall to HK$19.4 billion in 2020 underlying profit dragged down by hotel, aircraft leasing and UK’s Greene King pub businesses.
Shares of CK Asset climbed 2.5% to HK$47.05 on Thursday ahead of the announcements, in its largest daily percentage gain since Feb 25.
Source: Reuters.com