The largest global port operator, Hutchison Whampoa Ltd , boosted its stake in Shenzhen and Hong Kong container ports, the world's third- and fourth-busiest, sending its stock five percent higher.
Hutchison said on Monday it had agreed to buy port and property assets from partner China Resources (Holdings) Co Ltd, parent of China Resources Enterprise Ltd , for HK$5.7 billion ($732 million).
Its shares closed up 5.25 percent at HK$84.20, the highest level since November 12, and outperforming a 1.7 percent gain on the broader market. .HSI
"China Resources has been looking to divest its port operations, and selling to Hutchison is a win-win situation," said Credit Suisse analyst Cusson Leung.
"The most important mission for Hutchison going forward is to seek investment opportunities to deploy its cash. This is the best way to utilize the resources," he said, referring to the acquisition of port assets.
Hutchison, a ports-to-telecommunications conglomerate controlled by tycoon Li Ka-shing, has completed most of its investments in its third-generation (3G) mobile networks and is now seeing profits from its operations.
Deutsche Bank analysts had forecast the company's 3G business was expected to turn positive in the second half of 2010 with earnings before interest and tax (EBIT) to grow to HK$3.3 billion in 2011 and HK$3.9 billion in 2012.
Shares of Hutchison surged about 50 percent in 2010 on optimism about its telecoms business and expectations of strong growth in its other core businesses, including property, ports and retail.
Hutchison said the acquisition included a 10 percent stake each in HIT Investments Ltd, Splendid Century Ltd, Eckstein Resources Ltd and Hutchison Ports Yantian Investments Ltd, representing all issued shares held by China Resources in these companies.
"We are confident about the prospect of our port business and are happy to have the chance to increase our stakes in these companies," said Jeremy Lau, a spokesman of Hutchison.
The group will also take a 12 percent stake in a property firm Omaha Investments Ltd and the shareholder loans of Omaha and Hongkong International Terminals Ltd (HIT), a unit of HIT Investment, owe to China Resources, it said.
Before the deal, Hutchison had about 53 percent of HIT, the biggest container port operator in Hong Kong, managing 12 berths in Hong Kong's Kwai Tsing Container Terminals.
The deal also included land and buildings in Hong Kong's Kwun Tong, in east Kowloon.
The move would allow Hutchison to increase its stake in HIT Investments Ltd and some properties, the company said without giving the company's holdings in the assets after the deal.
Hutchison said on Monday it had agreed to buy port and property assets from partner China Resources (Holdings) Co Ltd, parent of China Resources Enterprise Ltd , for HK$5.7 billion ($732 million).
Its shares closed up 5.25 percent at HK$84.20, the highest level since November 12, and outperforming a 1.7 percent gain on the broader market. .HSI
"China Resources has been looking to divest its port operations, and selling to Hutchison is a win-win situation," said Credit Suisse analyst Cusson Leung.
"The most important mission for Hutchison going forward is to seek investment opportunities to deploy its cash. This is the best way to utilize the resources," he said, referring to the acquisition of port assets.
Hutchison, a ports-to-telecommunications conglomerate controlled by tycoon Li Ka-shing, has completed most of its investments in its third-generation (3G) mobile networks and is now seeing profits from its operations.
Deutsche Bank analysts had forecast the company's 3G business was expected to turn positive in the second half of 2010 with earnings before interest and tax (EBIT) to grow to HK$3.3 billion in 2011 and HK$3.9 billion in 2012.
Shares of Hutchison surged about 50 percent in 2010 on optimism about its telecoms business and expectations of strong growth in its other core businesses, including property, ports and retail.
Hutchison said the acquisition included a 10 percent stake each in HIT Investments Ltd, Splendid Century Ltd, Eckstein Resources Ltd and Hutchison Ports Yantian Investments Ltd, representing all issued shares held by China Resources in these companies.
"We are confident about the prospect of our port business and are happy to have the chance to increase our stakes in these companies," said Jeremy Lau, a spokesman of Hutchison.
The group will also take a 12 percent stake in a property firm Omaha Investments Ltd and the shareholder loans of Omaha and Hongkong International Terminals Ltd (HIT), a unit of HIT Investment, owe to China Resources, it said.
Before the deal, Hutchison had about 53 percent of HIT, the biggest container port operator in Hong Kong, managing 12 berths in Hong Kong's Kwai Tsing Container Terminals.
The deal also included land and buildings in Hong Kong's Kwun Tong, in east Kowloon.
The move would allow Hutchison to increase its stake in HIT Investments Ltd and some properties, the company said without giving the company's holdings in the assets after the deal.