Tiger Global nets HK$1b from stake in Hopson

PUBLISHED : Thursday, 04 January, 2007, 12:00am
UPDATED : Thursday, 04 January, 2007, 12:00am

Strong gains in stock market prompt institutional investors to cash out

Institutional investors are taking advantage of the recent strong gains in the Hong Kong stock market to cash in shares worth as much as HK$1.86 billion through two individual share placements.

Tiger Global Investment, a United States hedge fund with more than US$1.2 billion in assets, sold 53 million existing shares in mainland property developer Hopson Development Holdings at an offer price of HK$21.25 per share to raise HK$1.14 billion, according to a sale document sent to fund managers.

The final price represents the middle of an indicative range of HK$21.20 to HK$21.30 each, the document showed. Credit Suisse is the sole sale arranger.

'The response is very good as the offering was at least two times covered. Investors are still betting heavily on China concepts, particularly on leading industry players,' according to one source who is close to the deal.

Hopson shares have gained more than 120 per cent in the past 12 months and almost 50 per cent since September 28.

This will be the last sell-off by Tiger Global in the mainland developer as it had offloaded half of its stake in Hopson for HK$812.5 million in September last year.

Hopson, one of the largest property developers in China, brought in Tiger Global and Temasek Holdings, the investment arm of the Singapore government, as strategic investors in 2005.

The two parties no longer hold stakes in Hopson after offloading them through four separate placements during the past 13 months.

Meanwhile, an institutional investor in Hutchison Telecommunications International Ltd (HTIL), the emerging-markets mobile-phone firm controlled by Hong Kong billionaire Li Ka-shing, was selling up to HK$720 million worth of secondary shares through a private offering after the market closed yesterday, market sources said.

The investor was offering 37 million existing HTIL shares at between HK$19 and HK$19.48 apiece, representing as much as a 4 per cent discount to the stock's HK$19.88 closing price, according to a term sheet obtained by professional investors.

The deal was being arranged by Citigroup.

'An overwhelming response is expected as HTIL is being approached by several renowned corporates showing interests in its Indian mobile division,' said a fund manager involved in the deal.

HTIL shares have gained 85 per cent since the middle of June.

At least three parties have formally given notification that they are interested in buying stakes in Hutchison Essar, a venture owned by HTIL and India's Essar Group.

A group led by Britain-based mobile operator Vodafone Group, Reliance Communications, the second-largest mobile operator in India, and Essar Group, are likely to be involved in a US$20 billion bidding war for HTIL's Indian assets.