CK Hutchison Holdings’ US$23 billion plan to sell its worldwide ports to BlackRock just needs the support from 15 per cent of the minority shareholders to carry the day, and the flagship company of tycoon Li Ka-shing is dangling a bonus estimated at HK$25 per share to sway their vote.
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The threshold is low, because Li and his elder son Victor control 30.43 per cent of Hutchison – almost 24 per cent of that in a trust under the name of the nonagenarian tycoon and the balance in a string of nominee companies – while BlackRock held 4.84 per cent as of a March 12 filing.
The deal, called a “very substantial disposal,” needs the support of 50 per cent of eligible shareholdings in a specially arranged shareholder meeting, according to Chapter 14 of Hong Kong’s listing rules.
“Li’s family, as the largest shareholder, can vote in the shareholders’ meeting” because the sale is not a connected transaction between related parties under the listing rules of the Hong Kong stock exchange, where Hutchison’s shares are listed, said Kenny Tang Sing-Hing, the chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
BlackRock is also eligible to vote, said Zoey Zhou, a credit research analyst at CreditSights, adding that a 15 per cent shortfall “is not hard” to overcome, “given the potential of shareholder rewards from the transaction.”
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The March 4 proposal to sell Hutchison’s interest in 199 berths in 43 ports spread over 23 countries is estimated to generate US$19 billion of windfall for the company. That translates to HK$25 (US$3.22) per share, or almost 65 per cent of Hutchison’s March 4 closing price before the company unveiled its deal.