Li Ka-shing Sells 25% Stake In Retailer A.S. Watson To Temasek, Agrees To Pay Investors Special Dividend

By March 21, 2014Bitcoin Business
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Li Ka-shing Sells 25% Stake In Retailer A.S. Watson To Temasek, Agrees To Pay Investors Special Dividend

Hutchison Whampoa Hutchison Whampoa Limited, controlled by Asia’s richest person Li Ka-shing, announced Friday the formation of a strategic alliance with Singapore’s Temasek in which the Singaporean state investment company will buy an indirect equity interest of 24.95% in its retail group, A.S. Watson, for $5.7 billion. The deal values A.S. Watson, the largest health and beauty retailer in Asia and Europe with 10,500 stores in 25 countries, at nearly $23 billion.

As part of the transaction, which is expected to close in April, Hutchinson Whampoa announced it will distribute approximately 70% of the net proceeds of the transaction as a special dividend 90 cents per share. Li will get $900 million, bringing his net worth up above $32 billion. He already received dividends of $1.7 billion in the past two years.

Originally Li had been planning to list the company but tabled those plans when this deal was announced. Li, who is one of the most influential investors in Hong Kong, has been getting heat lately for reportedly pulling investment out of Hong Kong and China, something he has gone on record refuting.   In today’s announcement, he sought again to assure the media that he is committed to Hong Kong. “94% of A.S. Watson’s business (in store numbers) is outside of HK and we are bringing these proceeds back to HK shareholders through this special dividend.  We hope this puts to rest these accusations of withdrawal of investment,” said Li at a press conference on Friday, “Even if investing in HK has a smaller return than overseas, we will still invest in HK, but our responsibility is to shareholders.  If the return is too low, we can’t make that investment.”

Li also responded to perceived accusations of hegemony.  “After doing business for many years, I have an understanding that if certain newspapers stop attacking me, their sales will drop, so I’ve taken a very forgiving attitude,” said Li at a press conference on Friday, “I often hear accusations that “Hong Kong belongs to Li”, so today a smaller Hong Kong presence is the right decision.  We brought back money earned from over 90% of the ASW business overseas and brought it back to Hong Kong.  I hope everyone is satisfied.”

One of the world’s great empire builders, Li oversees a far-reaching conglomerate with 270,000 employees in 52 countries. While he is by far the richest person in Asia, he could be a lot wealthier if he so chose. The reason: Li is probably the only person on earth who invested in Facebook as a high-stakes hobby and made no money from it. Li bet on Facebook, a decision he says took him five minutes to make in December 2007, through his charitable Li Ka Shing Foundation.  In fact, all of his tech bets, whether in Spotify, Siri, or more recently Bitcoin payment service provider, BitPay, benefit the foundation, not him.

Li, whose family fled to Hong Kong during the Sino-Japanese war, had to quit school at age 12 after his father, a primary school principal in China, died from Tuberculosis. He made his early fortune making plastic toys and later plastic flowers. Li is one of 23 individuals who have made our billionaire rankings every year since the inaugural list in 1987.


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