Hong Kong’s billionaire Cheng family is offering to buy the NWS Holdings Ltd. shares that it doesn’t own and take the company private in a HK$35.5 billion ($4.5 billion) deal.
Chow Tai Fook Enterprises, the property dynasty’s investment holdings flagship, made an offer of HK$9.15 per share, according to a statement to the Hong Kong stock exchange on Tuesday. The offer is a 14.5% premium over the last closing price.
Shares of New World Development Co., the Chengs’ conglomerate, and NWS Holdings were halted on Friday and will resume trading Tuesday at 9 a.m. local time.
New World Development, which currently holds 2.38 billion NWS shares, will receive about HK$21.8 billion from the disposal, the statement shows.
Hong Kong’s developers are grappling with a property market that is in a rare downturn, with higher interest rates expected to continue weighing on sales. Major developers have resorted to offering discounts and various perks to boost sales.
In New World’s first-half earnings, the developer saw underlying profit fall 14% to HK$3.36 billion due to Covid-19 disruptions. The company then said that its deleveraging plan will include capex optimization, disposals of non-core assets and a dividend reset.
Weaker home prices in the second half of this year mean that developers with high leverage ratios could try to offload their properties more aggressively, said Bloomberg Intelligence analyst Patrick Wong.
New World, with a business spanning construction, insurance and hotels, recently sold a hotel and an office property. It had a total asset value of approximately HK$621.9 billion at the end of last year, according to its website.
HSBC Holdings Plc, BOCI Asia Ltd. and ING Bank NV are advising on the deal.
--With assistance from Adam Haigh.
