In a stormy meeting, shareholders voted down Li Ka-shing’s proposed US$13 billion merger of his infrastructure arm and a cash-rich affiliate power firm, The Wall Street Journal reported.
The rejection of the deal to merge Cheung Kong Infrastructure Holdings Ltd. (01038.HK) and Power Assets Holdings Ltd. (00006.HK) — is a setback for the tycoon, fondly known among investors as “Superman”, and his elder son and likely successor, Victor Li Tzar-kuoi.
CKI had signaled it wanted access to a US$8.75 billion cash pot held by the electric utility, to use it to fund acquisitions.
But about half of the Power Assets shareholders who voted Tuesday rejected the deal, surpassing the threshold needed to kill the merger, CKI said in a regulatory filing.
Some analysts and two influential shareholder-proxy firms had opposed the deal, suggesting that Power Assets was worth more than CKI was offering.
It is the second time that Hong Kong’s richest man has failed to get his hands on Power Assets’ cash.
Earlier this year, the firm’s shareholders voted down a proposal for the firm to buy as much as US$1.58 billion of CKI bonds.
Hong Kong securities law prevents Li from revisiting a merger for at least one year.
Meanwhile, analysts say, Li will face pressure to return to investors at least some of the billions in cash locked away in Power Assets through a special dividend.
On Tuesday, hundreds of elderly mom-and-pop investors streamed into a five-star hotel owned by Li to grill his right-hand man, Power Assets chairman Canning Fok Kin-ning, about the deal.
Fok was visibly agitated as he was repeatedly asked about whether the merger was in the best interests of shareholders, the report said, citing three people who attended the meeting.
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