Hopewell sells highway unit for US$1.25b to Shenzhen government-backed firm
Upon the deal’s completion and under takeover rules, Shenzhen Investment will be required to make a mandatory general offer
Hopewell Holdings said it would sell 66.69 per cent of its highway business to Shenzhen Investment International Capital Holdings Infrastructure for HK$9.87 billion (US$1.25 billion), or HK$4.80 a share, in an all-cash deal.
The sale of Hopewell Highway Infrastructure will be made through the company’s indirectly wholly-owned subsidiary, Anber Investment.
Upon the deal’s completion and under Rule 26 of the Takeover Code, Shenzhen Investment will be required to make a mandatory general offer for all Hopewell Highway shares it does not already owned.
“The acquisition … offers an attractive investment opportunity for Shenzhen Investment Holding in the important infrastructure sector …,” Hopewell Holdings and Shenzhen Investment said in a joint filing to the Hong Kong stock exchange on Friday.
As Shenzhen is one of the core cities leading the development of the Guangdong-Hong Kong-Macau “Greater Bay Area”, the deal represents a valuable addition to Shenzhen Investment’s portfolio and a significant contributor to its “continuous expansion of the connections” in the area, the filing said.
Hopewell Highway focuses on the initiation, development, promotion and operation of toll motorways and bridges in China. It has a net asset value of about 5.56 billion yuan (HK$854.32 million) as of the end of June 2017.
For the years ended June 2016 and 2017, it posted net profits of 520.5 million yuan and 631.6 million yuan, respectively. Hopewell Highway’s Hong Kong-traded shares closed flat at HK$4.98 on Friday, while Hopewell Holdings closed down 0.7 per cent at HK$28.85.
