Hong Kong’s third richest family makes US$4.6 billion takeover offer for NWS to help ease debt burden at New World Development

Billionaire family offers to take full control of NWS Holdings, including a 60.9 per cent block held by New World Development worth HK$21.8 billion (US$2.78 billion)

Offer values the NWS infrastructure group at HK$9.15 per share or HK$35.8 billion and another HK$112 million for unexpired stock options

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New World Development chairman Henry Cheng Kar-shun meets the media in September 2016. Photo: Dickson Lee

Published: 9:21am, 27 Jun 2023Updated: 4:38pm, 27 Jun 2023

Hong Kong’s third richest family, led by billionaire Henry Cheng Kar-shun, is seeking full control of its infrastructure unit NWS Holdings in a takeover offer that values the target at HK$35.8 billion (US$4.6 billion). The offer will help lighten the debt load at New World Development (NWD).

The family, through Chow Tai Fook Enterprises, offered HK$9.15 per share for NWS it does not already own, a 14.5 per cent premium to the stock’s last traded price before trading was halted last week for the announcement. It plans to retain NWS’s listing status.

The offer is for about 95 per cent of the shares not under its direct control, including a 60.9 per cent block held by NWD, a family-controlled developer that has been struggling with debt burden. Chow Tai Fook Enterprises owns 45.24 per cent of NWD.

That block is worth HK$21.8 billion, from which NWD has proposed to hand out HK$4 billion, or HK$1.59 per share as special dividend to its shareholders to gain their approval.

(L to R) New World’s CFO Au Tak-cheong, executive vice-chairman Adrian Cheng, chairman Henry Cheng Kar-shun and executive director Gary Chen meet the press in 2016. Photo: Jonathan Wong

NWS surged 11.4 per cent to HK$8.90 on Tuesday, while NWD jumped as much as 10.1 before closing 0.8 per cent higher at HK$19.68.