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Share Name | Share Symbol | Market | Type |
---|---|---|---|
COPT Defense Properties | NYSE:CDP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.15 | 0.52% | 29.04 | 29.09 | 28.77 | 28.98 | 603,314 | 22:30:00 |
By Joanne Chiu And Wayne Ma
HONG KONG-- Hutchison Whampoa, Asian billionaire Li Ka-shing's acquisitive conglomerate, said Friday that Singapore and Abu Dhabi's sovereign-wealth funds are among investors paying up to GBP3.1 billion ($4.7 billion) for a third of the Hong Kong company's soon-to-be enlarged British cellphone operations.
The stake sale is in line with Hutchison's strategy of using as little debt as possible to pay for acquisitions, which have accelerated this year in Europe. Earlier this year, Hutchison, already owner of U.K. wireless company Three, said it was buying U.K. mobile-phone operator O2 from Spain's Telefonica SA for GBP9.25 billion, plus up to GBP1 billion later if the newly combined company meets cash-flow targets. The stake sale will reduce Hutchison's outlay by a third.
The deal is one of the biggest European transactions this year and combining O2 with Three would create Britain's biggest cellphone operator by subscribers.
At the time the deal was announced, Hutchison Finance Director Frank Sixt said it would bring in other investors that were "the right compatible partners." On Friday, Hutchison named five that will buy a total stake of 32.98% in the combined 02-Three: Two of Canada's biggest pension funds, the Canada Pension Plan Investment Board and Caisse de Depot et Placement du Quebec, Singapore's sovereign-wealth fund GIC Pte. Ltd., Brazilian investment bank BTG Pactual and Abu Dhabi Investment Authority.
The five will pay GBP2.8 billion in total for the stakes, and add a further GBP329.8 million if the combined company meets cash-flow targets.
Hong Kong-based Hutchison, whose global holdings range from ports to energy assets, said in a statement that the proceeds from the stake sale, along with a GBP6 billion loan from HSBC Holdings PLC and GBP480 million from other company sources, would be used to fund the O2 deal, which awaits European Union regulatory approval.
CPPIB and the Caisse de Depot are Canada's two biggest pensions funds, together overseeing a total of about 464.7 billion Canadian dollars (US$383.1 billion) in assets, and are active global investors in public and private markets. The funds' investment in Hutchison 3G UK Holdings (CI) Ltd. is consistent with their focus on investing in assets that generate steady cash flow for meeting long-term pension liabilities.
The telecom sector "is where innovation and growth is happening, and (Europe) is one of the major telecom markets of the world," Andreas Beroutsos, head of private equity and infrastructure at the Caisse de Depot, said in a phone interview.
Establishing a relationship with Hutchison could also generate opportunities for the Quebec pension fund to participate in future deals with the Hong Kong conglomerate, Mr. Beroutsos said.
Mark Jenkins, Senior Managing Director & Global Head of Private Investments at CPPIB, said buying into the combined cellphone operator would give the Canadian pension plan "a meaningful stake in a leading mobile operator."
"We expect this investment will generate attractive long-term risk-adjusted returns, which is appealing for an investor like CPPIB, " said Mr. Jenkins.
Singapore sovereign-wealth fund GIC said its investment for the initial stake will be GBP1.1 billion, assuming EU regulators approve Hutchison's acquisition and the combination of the phone companies takes place. GIC has been building up assets across the globe from sectors spanning property to technology. Earlier this year, it bought 5% stake of U.S. information and television ratings company Nielsen NV, a deal valued at over $800 million. and bought British roadside-assistance provider RAC from Carlyle Group LP.
The O2 purchase would cap a reversal of fortune for Mr. Li's European telecommunications business, which spent almost a decade in the doldrums, and triple Three's U.K. subscribers to 34 million. Mr. Li has been on a buying spree in Europe since the financial crisis, snapping up asses that include water and waste-management utilities.
He is taking advantage of relatively cheaper companies and picking up assets that offer a steady cash flow, while at the same time reducing exposure to Hong Kong and China. Earlier this year, Mr. Li announced a string of deals in Europe that included takeovers of a British train-car maker and a Dutch drugstore chain.
Ben Dummett in Toronto and PR Venkat in Singapore contributed to this article.
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