Date
18 October 2017
Tycoon Lee Shau-kee has dismissed talk that he could take Henderson Land, his group flagship, private. Photo: HKEJ
Tycoon Lee Shau-kee has dismissed talk that he could take Henderson Land, his group flagship, private. Photo: HKEJ

No privatization plan for Henderson Land, says Lee Shau-kee

Henderson Land Development Co. (00012.HK) chairman Lee Shau-kee said on Monday that he has no plans to take the company private.

The tycoon said that he already owns 72.28 percent stake in the developer and that he doesn’t see any need for a privatization deal.

According to the Hong Kong Economic Journal, it will take about HK$4.36 billion for Lee to acquire an additional 2.72 percent stake, or 89.92 million shares, in Henderson Land and take it to the 75 percent level.

The calculation is based on the stock’s latest closing price of HK$48.45.

If the stake reaches the 75 percent, Lee will be required to make a general offer to minority shareholders.

Some analysts had been speculating that Lee might want to privatize the firm as its shares have been trading at about 51 percent discount to the end-2015 net asset value of HK$100.1.

The net asset value appraised by DTZ has taken into account the equity value of the company’s non-investment properties.

According to JPMorgan analysts, Henderson Land’s business model that levers on the redevelopment of old buildings has led to lower valuations compared to peers. 

The brokerage maintains an “underweight” rating on the stock although the property giant announced a 27 percent jump in 2015 net profit at HK$21.33 billion.

Underlying earnings, which exclude property revaluation gains, were up about 12 percent at HK$11 billion. 

[Chinese version中文版]

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