Li Ka-shing sells nearly 25pc of AS Watson to Singapore investment giant Temasek
Singapore investment giant Temasek snaps up almost 25pc stake in Li Ka-shing's retail chain as tycoon reveals plan for dual offering
Singapore's giant state-owned investment company Temasek has splashed out HK$44 billion to own an almost 25 per cent stake in billionaire Li Ka-shing's retail arm AS Watson.
The investment by the sovereign fund - its biggest ever in Hong Kong - halted the planned US$6 billion listing of AS Watson, which Li now says is "unlikely to happen this year".
Li said at a media briefing yesterday: "At the time of listing in about two to three years, Watson's valuation must be higher than the price Temasek paid. The share sale should be taking place in Hong Kong and Singapore."
At the time of listing in about two to three years, Watson's valuation must be higher than the price Temasek paid. The share sale should be taking place in Hong Kong and Singapore
That dashed earlier speculation the firm wanted a dual listing in Hong Kong and London, followed by a secondary listing in Singapore.
Li said there was too much work involved in listing in three different jurisdictions and would be too clumsy.
The deal, which put a price-earnings ratio of 23 times last year's earnings on AS Watson, is seen as a huge bet for Temasek.
Top-line growth and profit margin in Hong Kong has been largely flat, but the health and beauty unit of AS Watson on the mainland has grown rapidly thanks to store expansion.
AS Watson is China's largest drug store chain, with a one-fifth share of the market.