HONG KONG, Jan 8, 2010 (AFP) - Hong Kong ports-to-retail conglomerate Hutchison Whampoa on Friday offered to take its loss-making telecoms subsidiary private in a deal valued at 545 million US dollars.
The group, headed by tycoon Li Ka-shing, said the proposal to take over Hutchison Telecom would allow it to manage the troubled firm's investments more flexibly.
Shareholders in the telecoms group will be offered 2.20 Hong Kong dollars (0.28 US) a share. That was a 33.3 percent premium to the company's price when its shares were suspended on Monday.
Shares of telecom, which resumed trading Friday after Monday's suspension, surged 28.5 percent to 2.12 Hong Kong dollars following the buyout announcement.
Hutchison Whampoa, which currently holds a 60.4 percent stake in the firm, closed flat at 56.35 Hong Kong dollars.
As well as telecoms, Hutchison Whampoa has holdings in ports, retail, property, energy and infrastructure across the world.
Hutchison Telecom, an emerging markets-focused group, has undertaken a string of asset disposals in recent years including in India and Hong Kong and Macau.
But it said in a joint statement with its parent that the remaining operations in Indonesia, Sri Lanka, Thailand and Vietnam all "generate negative cash flow."
The statement said that in the short and medium term Hutchison Telecom "faces a potential uncertain financial performance with the associated risk of significant share price volatility, thus making it less suited to remain a publicly listed entity."
It added that the privatisation would better enable Hutchison Telecom to make investment decisions "without the pressures associated with being a publicly listed company".