SF Holding, one of China's largest package delivery services, is seeking to acquire control of tycoon Robert Kuok Hock-nien's Kerry Logistics Network (0636) in a HK$17.6 billion deal for global expansion, pushing the two stocks to record highs.
The Chinese courier plans to buy a 51.8 percent stake in Kerry Logistics at HK$18.8 per share, according to a joint statement to the Hong Kong Stock Exchange yesterday.
Kerry Logistics also plans to sell some warehouse assets for HK$13.5 billion and its Taiwan business for NT$4.5 billion (HK$1.24 billion) to its parent company, the statement said. Kerry Logistics is proposing a special dividend of HK$7.28 per share conditional on the completion of the warehouses sale. Shareholders who accept SF's offer will receive HK$26.08, including the special dividend, representing an 11 percent premium to the last closing price.
Kuok, who is Malaysia's richest person, controls Kerry Logistics through his family holding company Kerry Group and its real estate arm Kerry Properties (0683). SF Holding will offer cash for the Kerry Logistics stake and plans to keep the company listed in Hong Kong. After the transaction, Kerry Properties's holding in the logistics firm will be cut from 40 percent to around 20 percent
The two firms have been communicating for three to four years about the deal, SF Holding chairman Dick Wang Wei said at a press briefing yesterday. "The deal demonstrated the Kuok family's vote of confidence in SF Holding and myself," he said. "While Kerry Group gave us control of the company - we'll still jointly manage Kerry Logistics in the future."
Shares in SF Holding rose by their 10 percent limit in Shenzhen after trading resumed. Kerry Logistics rose 5.54 percent to a record high, while Kerry Properties ended 6.81 percent higher.
The deal will help SF Holding boost its distribution network and supply-chain services as it gains a footprint across Asia. Kerry Logistics would become the Chinese courier's primary vehicle for international expansion.
Meanwhile, SF Holdings is planning to list its three properties in Hong Kong, Foshan and Wuhu as a Real Estate Investment Trust.
SF Real Estate Investment Trust has filed an initial public offering application to the Hong Kong Stock Exchange.
Announcing the deal are, from left, Kerry Logistics CEO William Ma, SF Holding chairman Dick Wang Wei, Kerry Logistics chairman Kwok Khoon-hua and SF Holding chief strategy officer Chen Fei. SING TAO
