Chairman of HK's Hopewell offers to take firm private for $2.7 billion, stock soars

HONG KONG (Reuters) - Hopewell Holdings Ltd 0054.HK said a consortium led by its chairman offered to take the Hong Kong-based property and infrastructure group private for HK$21.26 billion ($2.7 billion), sending its stock surging as much as 32 percent.

The deal, offered by Chairman Gordon Wu and affiliates, will allow shareholders to exit their investment amid increased market uncertainty, Hopewell said, underlining the volatility that Asian stocks are facing due to trade tension between China and the United States.

Hopewell’s shares, suspended from trading since Monday, surged to HK$34.90, their highest level in more than 11 years.

They were still trading below the offer price of HK$38.8 per share, which represents a nearly 47 percent premium over the stock’s previous close.

“Given the continued low liquidity of the shares, it is difficult for the scheme shareholders to execute on-market disposals efficiently without adversely affecting the market price of the shares,” Hopewell said in a filing to the Hong Kong bourse late on Wednesday.

The company, which listed its shares in Hong Kong in 1980, also has business interests including power plants, property management, hotel ownership and management, restaurant operations and food catering.

Analysts said liquidity and trading interest on the stock had been low as investors struggled to discern a clear plan behind its wide range of businesses.

“It’s market position and focus are not clear enough to many investors as they are quite low-profile and they don’t do much to promote themselves,” said Linus Yip, chief strategist at First Shanghai Securities.

“It is attractive to investors who look for value play but not to those who are concerned about fund flow that makes it easy for them to buy and sell.”

The consortium, which owns 36.9 percent of the company, offered to buy all outstanding 547.85 million shares, or 63.1 percent of the issued share capital it does not already own, for HK$38.8 per share in cash.

($1 = 7.8140 Hong Kong dollars)

Reporting by Donny Kwok; Editing by Sayantani Ghosh and Stephen Coates