A £3.4 billion deal between Asia’s wealthiest man Li Ka-shing and a Singaporean government fund has scuppered immediate hopes of a London float for the Hong Kong owner of Superdrug.
Li’s Hutchison Whampoa had been planning to list retail group AS Watson, owner of high street chains Superdrug, Savers and The Perfume Shop, in London and Hong Kong.
But today it sold a 25% stake in the group to Singapore sovereign wealth fund Temasek for HK$44 billion (£3.4 billion). It said this “completed its strategic review of the options for maximising the value of AS Watson”.
That comes as a blow to the London Stock Exchange, which had been selected for the dual-listing alongside the Hong Kong stock exchange. It will also be a blow to the bankers advising on the IPO — Bank of America Merrill Lynch, DBS, Goldman Sachs and HSBC — who would have been in line for hefty fees if the share offer had gone ahead.
Today’s deal values AS Watson at around £13.8 billion, higher than the suggested £12 billion valuation. The market had expected the group to list a stake in the business by the end of the year but the deal with Temasek allows Li to cash in part of his investment without going through the drawn-out process of a float.
Hutchison said it will pay a special dividend of HK$7 a share after the deal.
Canning Fok, group managing director at Hutchison Whampoa, said: “We are pleased to have Temasek, a renowned international investor, as our long-term partner. This demonstrates their confidence in the growth opportunities and prospects of our retail businesses.”
The Hutchison Temasek joint venture confirmed that in the longer term they would “work together towards listing AS Watson at a suitable time”.
