NWS shares jump on buyout offer from Chow Tai Fook
The business empire controlled by tycoon Henry Cheng and his family has proposed a HK$35 billion deal to take private its infrastructure arm NWS. In a joint announcement to the Hong Kong stock exchange, New World Development (NWD) and Chow Tai Fook Enterprises (CTFH) said they are offering to buy all remaining shares they do not already own in the market for HK$9.15 each, a premium of 14.5 percent over the last closing price on Friday. The deal is valued at approximately HK$34.8 billion on the assumption that the number of NWS shares and options will not change. But the offer will rise to HK$35.4 billion if all options are exercised. NWD and CTFH said the offer represents an attractive exit premium for NWS shareholders who they say are unlikely to receive an alternative offer on more favourable terms, or at all. The privatisation will generate proceeds of more than HK$21 billion for NWD which plans to use the money to pay a special dividend of HK$4 billion to its shareholders if the deal goes through. The remaining proceeds are expected to be used for repayment of existing borrowings and as general working capital of the NWD Group. The property giant said the plan will immediately strengthen its financial position and enhance its strategic focus on property business. Following the privatisation, NWS will become an indirect wholly owned subsidiary of CTFH and will be delisted from the stock exchange. NWS shares surged more than 8 percent and NWD shares jumped more than 9 percent at open. The proposed deal was announced before the market opened on Tuesday morning.