Hutchison Whampoa

Hutchison eyes port stake

PUBLISHED : Wednesday, 26 April, 2006, 12:00am
UPDATED : Wednesday, 26 April, 2006, 12:00am

Hutchison Whampoa, the world's biggest operator of container ports, is using its clout as a potential buyer to push for a lower valuation for next month's anticipated $1.05 billion share sale by Tianjin Port Development, market sources say.

The company has been in talks with Tianjin Port about taking a stake in its initial public offering, but the volatility of the market this week has kept the final details on the table.

'It has shown great interest in buying a less than 10 per cent stake, but the recent market correction has pushed it to ask for lower prices,' a source said.

A deal would depend mainly on pricing and the situation was expected to become clearer in the next few days, he said.

Analysts say Hutchison faces a tough task in its bid to lower Tianjin's asking price, given the bullish sentiment created by the US$4.38 billion sale last week of 20 per cent of its global terminal empire to Singapore's PSA International.

The operator of China's fifth-largest port, Tianjin Port, plans to sell 578 million new shares at between $1.50 and $1.83 each, translating into 17.4 to 21.2 times last year's earnings.A spin-off of state-controlled Tianjin Development Holdings, the firm was set to kick off its retail offering in the middle of next month, sources said.

A Hutchison spokesman declined to comment last night.

The company has committed to buying a 1 per cent stake in Dalian Port, which starts trading Friday.