Li Ka-shing wraps up Duet deal in biggest overseas purchase
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SYDNEY, April 21 ― Li Ka-shing has wrapped up his biggest overseas deal on record, the A$7.4 billion (RM24.6 billion) takeover bid for Australian power provider Duet Group, nine months after he was barred from buying another power asset there on national security concerns.
A group led by Cheung Kong Infrastructure Holdings Ltd., the power plant and toll road operator Li controls, won approval from Foreign Investment Review Board for the takeover, Duet said Friday in a statement. The A$3.03 a share offer, raised to that level in January, is about 10 per cent more than yesterday’s closing price, prompting the stock to jump 9.5 per cent to A$3.01 as of the close in Sydney today.
Asia’s third-richest man had to sweeten the deal in January and add a special dividend of 3 cents a share to win control of the energy network, a deal that has unfolded amid rising concern that Europe, his biggest market, is becoming less welcoming to outside investment. Li, 88, has been adding overseas assets to diversify a business empire that encompasses ports, property, telecommunications, retail and energy.
“As China is increasingly becoming intrusive in how Hong Kong runs its affairs, Li Ka-shing is increasingly focusing on overseas investments,” Justin Tang, director of global special situations at Religare Capital Markets in Singapore, said by phone.
Li-controlled companies already own stakes in Australian assets including SA Power Networks, Powercor Australia, Australian Gas Networks and CitiPower I Pty Ltd.
The offer by three of Li-controlled companies ― Cheung Kong Property Holdings Ltd., Cheung Kong Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. is their largest reported, according to data compiled by Bloomberg. The acquisition, formally announced in December, helped bring the 2016 deals total for the three companies to US$12.8 billion, the highest since at least 2005, the data show.
Duet’s assets include the Dampier-Bunbury pipeline in Western Australia, a stake in electricity distributor United Energy, gas distribution business Multinet Gas, pipelines business DBP Development Group and Energy Developments Ltd., according to Duet’s website.
CKI didn’t respond to email and phone calls to its media relations department.
Australian Treasurer Scott Morrison has no objection to the bid by a consortium led by CKI, Duet said in a statement Friday. The deal was approved “overwhelmingly” by proxy voters, Duet Chairman Doug Halley told a meeting in Sydney, with 99.3 per cent support. A spokeswoman for Morrison confirmed the approval. ― Bloomberg