Shaw Brothers looking to sell HK$2.4b Clear Water Bay site
Shaw Brothers, the media and entertainment company, was looking to dispose of its Clear Water Bay studio site worth an estimated HK$2.4 billion, market sources said yesterday.
The site, with a gross area of 920,000 square feet, was expected to receive as early as August the government's estimation of the land premium required to change its use, which might help clear a major overhang on the potential sale, sources familiar with the situation said.
Shares in Shaw Brothers have risen sharply this week on renewed speculation that the company was approached by potential buyers for a takeover bid. The stock closed 1.26 per cent higher at HK$17.68 yesterday, after rising 14.55 per cent in intraday trade.
The market capitalisation of the company was HK$7.04 billion yesterday.
The site's estimated value is based on a price of HK$10,000 per square foot. A market watcher estimated that the land premium would be HK$2,000 to HK$3,000 per square foot, or HK$4.8 million to HK$7.2 million.
'The group has changed its view on the land amid rising property prices,' a market source said, citing the company's management as explaining it made the decision because 'we are not property developers'.
Shaw Brothers previously estimated that investment for the project would be more than HK$1.5 billion.
Kerry Group is considered one of the potential buyers for the Clear Water Bay site.
The site, which was the old TV City, together with an adjacent plot owned by Kerry's subsidiary SCMP Group - publisher of the South China Morning Post - last year received Town Planning Board approval for a master development plan to build about 900 residential and hotel units.
The book value for Shaw Brothers' Clear Water Bay site was only HK$124 million in the six months to December last year, according to analysts' estimation.
'It would unlock the value of the land by adding the valuation of Shaw Brothers in HK$5.65 per share,' BNP Paribas research estimated.
However, Shaw Brothers yesterday issued an announcement in the morning denying that the company was negotiating with other parties.
Sir Run Run Shaw is the company's single largest shareholder with 74.6 per cent stake.
