Hong Kong "Superman" Li Ka-shing cashes in

HONG KONG Mon Feb 12, 2007 5:27am EST

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HONG KONG (Reuters) - Hong Kong billionaire Li Ka-shing cemented his status as a master of market timing with an $11 billion deal to sell a controlling stake in Indian mobile carrier Hutchison Essar to Vodafone Group Ltd. (VOD.L).

Known in Hong Kong as "Superman" for his deal-making prowess, the 78-year-old Li, who fled Japanese-occupied mainland China with his family in 1940, built a plastic flower business into a global empire with more than 220,000 employees in 56 countries.

The archetype of the Hong Kong success story, Li, through his Hutchison Whampoa Ltd. (0013.HK) and Cheung Kong (0001.HK) flagships, owns the world's largest operator of container ports, the biggest health and beauty retailer, and Canada's No. 4 oil company, among many other holdings.

Unlike many Hong Kong tycoons who built fortunes on soaring property values as the former British colony evolved from a manufacturing hub to a financial center, Li leveraged local success to become a global player, with extensive holdings in Europe, Canada, Australia and elsewhere in Asia, including China.

And unlike many big Chinese family-run firms in Hong Kong, Hutchison's top management includes numerous foreigners.

Li's crowning deal was Hutchison Whampoa's sale of its Orange cellphone business in Europe to Mannesmann at the height of the telecoms boom in 1999 at a profit of $15.12 billion.

Known as a dispassionate dealmaker, Li last year sold 20 percent of Hutchison's ports business to Singapore rival PSA Corp. PSA.UL -- a deal that was likened by some to hocking part of the family silver. But at a profit of $3.12 billion on a $4.4 billion deal, shareholders had to applaud.

In Sunday's deal, Hutchison Telecommunications 2332.HK, nearly 50 percent owned by Hutchison Whampoa, will receive just over $11 billion for a business in which it has invested roughly $2 billion. Analysts agreed the deal valuation was rich and an opportune time for Hutchison Telecom to exit its most important market.

LI FAMILY CITY

An avid golfer and reader, Li was born on July 29 in the Chinese year of the Dragon.

While the bespectacled Li is known for personal thrift and likes to cut a benevolent figure -- he is an active philanthropist -- many Hong Kongers resent the pervasive role the Li family plays in the local economy.

It is cliche, but no less true, that it would be difficult to spend a day in Hong Kong without enriching the Li family.

Li's Hongkong Electric (0006.HK) is one of two power utilities in the city, while Cheung Kong is one of Hong Kong's biggest residential developers.

Li controls the ParknShop supermarket chain, the city's biggest, and one of its largest cellphone companies. His son Richard Li controls PCCW Ltd. (0008.HK), the city's dominant fixed-line carrier.

Hong Kongers sometimes use a Cantonese pun on his name, which translates to "Li family city".

WINS, LOSSES

Not every Li investment has proven so profitable.

Hutchison Whampoa has spent roughly $25 billion since 2000 on third generation (3G) mobile telecoms, mostly in Europe -- a business that is still a loss-making drag on its share price.

"He's been quite lucky with the telecom business -- except for 3G," said Francis Lun, general manager at Fulbright Securities in Hong Kong.

Meanwhile, Hutchison's efforts to buy bankrupt U.S. telecoms firm Global Crossing in 2002, were thwarted by worries over Li's close Beijing ties.

In 1979, Li became the first Chinese to take control of one of Hong Kong's big trading houses, or "hongs", when he bought 22 percent of Hutchison Whampoa, a stake he later expanded.

Li has used the Hutchison platform, as well as a habit of personally investing alongside his companies, to amass a fortune estimated by Forbes at $18.8 billion, which would make him the 10th richest man in the world and the wealthiest living in Asia.

Li, whose wife died 17 years ago, dismisses repeated questions about when he will retire, saying he has no plans to do so. When he does, he is expected to hand over the keys to his empire to his elder son Victor Li, who, unlike his younger brother Richard, keeps a low public profile.

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