Hong Kong tycoon's firm to buy British water utility

2nd August 2011, Comments 0 comments

Hong Kong billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings on Tuesday announced it would buy one of Britain's biggest water utilities in a deal worth nearly $4 billion.

Cheung Kong will pay 465 pence per share for Northumbrian Water, a premium of 21.4 percent on Northumbrian's share price before the Hong Kong group announced it was considering the purchase, the firms said in a statement.

The acquisition, which will be carried out by Cheung Kong through a newly incorporated firm called UK Water, values Northumbrian at about 2.41 billion pounds ($3.9 billion).

Northumbrian is one of Britain's biggest water services companies, supplying water to northeastern England. It has about 2.6 million customers.

The deal, which is subject to the approval of Northumbrian shareholders, was expected to close in October, the British firm said in a statement posted on its website.

"Whilst Northumbrian would have a strong future as an independent company, the consortium's offer to Northumbrian shareholders fairly values the current and future prospects of the company," said its Chairman Derek Wanless.

Cheung Kong Infrastructure Holdings is a division of Cheung Kong Holdings, the flagship company of Li, the richest man in Hong Kong and nicknamed "Superman" for his long-running business success.

Cheung Kong has interests in hotels, property, infrastructure, telecoms and retail businesses. It is one of the biggest developers in Hong Kong, where one in seven private residences were developed by the company.

Shares of Cheung Kong Infrastructure Holdings were trading 3.46 percent higher at HK$46.35 ($5.95) in afternoon trade Tuesday while parent company Cheung Kong Holdings was trading 0.49 percent higher at HK$122.

The 83-year-old Li was ranked in March as the 11th wealthiest person in the world by the Forbes rich list, with a net worth estimated at US$26 billion.

© 2011 AFP

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