Hong Kong's New World-backed NWS gets buyout offer from Chow Tai Fook

Hong Kong's NWS Holdings, a subsidiary of New World Development, said on Tuesday it had received an offer from local conglomerate Chow Tai Fook Enterprises that values it at HK$35.78 billion.

The HK$9.15 per-share offer represents a premium of 14.5 percent to NWS' last close of HK$7.99.

NWS, 61 percent owned by New World, is an investment holding company that operates a range of businesses predominantly in Hong Kong and in mainland China. Its core business includes toll roads, construction and insurance.

The disposal will immediately strengthen New World's financial position, providing the property developer with cash proceeds of HK$21.78 billion, the companies said in a joint statement.

The deal will sharpen New World's strategic focus on property development and investment, while NWS will enjoy greater financial flexibility to optimise its capital structure and improve its cost of capital, the companies added.

Hong Kong's top developers have enjoyed decades of lucrative returns in one of the world's most expensive property markets, but falling property sales and rents in both mainland China and the global financial centre, as well as rising interest rates are putting pressure on the sector.

Trading in shares of New World and NWS, which were suspended on Friday, will resume trade on Tuesday.

Chow Tai Fook Enterprises holds a 2.5 percent stake in NWS.

(Reuters)