Asia’s richest man Li Ka-Shing, has spent years snapping U.K. infrastructure. His latest purchase, U.K. mobile operator O2, will transform the industry there, leaving many wondering if Li is divesting out of his home territory. CCTV’s Cathy Yang reported this story from Hong Kong.
Asia's richest man Li Ka-Shing offers $15B bid for UK mobile firm O2Asia's richest man Li Ka-Shing, has spent years snapping U.K. infrastructure. His latest purchase, U.K. mobile operator O2, will transform the industry there, leaving many wondering if Li is divesting out of his home territory. CCTV's Cathy Yang reported this story from Hong Kong.
Less than two weeks after splitting his empire into two, Asia’s richest man shocked investors with his $15 billion proposed bid for O2, which would become Li’s biggest acquisition if completed. The deal would easily trump Li’s purchase of U.K. Power Networks in 2010.
The proposed deal sent Li’s Hutchison Whampoa shares to close above a hundred Hong Kong dollars ($12.9) last Friday, for the first time since September.
“The market believes the deal itself creates a lot of synergies. First of all, two telecom companies combined together will become the biggest players in the U.K.,” Lewis Wan, the CIO of the Pride Group, said.
Li’s latest European deal has renewed talk that he is divesting himself out of Hong Kong and mainland China — an allegation he has repeatedly denied. The proposed O2 deal has widened opinions in the investing community. Many are convinced the size of this latest deal speaks for itself.
“It makes good business sense. You look at one of his most successful companies in recent years — Cheung Kong Infrastructure. It’s basically investing in the infrastructure plays in Europe and he’s making a lot of money,” Francis Lun, CEO of GEO Securities, said.
In Hong Kong, Li’s Hutchison dominates businesses in electric utilities, ports, and supermarkets.
His property business extends beyond Hong Kong and into the Chinese mainland, but prices have since peaked, leaving Li’s property business an unattractive bet for investors.
For Sam Chi Yung, strategist of Delta Asia Securities which owns Hutchison shares, Li’s latest move is merely part of the overall business cycle.
“We can see Li’s family is a bit bearish on the property side. After a correction, Li’s family will also be back to the properties business,” Yung said.
It is not the first time Li has sold high and bought low. In 2000, Li sold Orange U.K. at the height of the dot-com bubble, and the next ten years saw him building out his property portfolio in both Hong Kong and on the mainland.
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