There was no intricate financial engineering and no astute savvy to the $72 million Li Ka-shing's Hutchison Whampoa pocketed just 72 hours after it bought a controlling stake in a relative unknown software developer. It was a quick profit that had turned entirely on a brand. Investors had flocked to Vanda Systems & Communications Holdings in September 2003 with the hope that Hutchison and Mr Li's 'Midas touch' would line their pockets with gold. The share price had soared by 86 per cent in three days. Hutchison simply cashed in on their expectations. Likewise just four months later, Hutchison firms raised a quick $1.8 billion after deciding to inject its fixed-line business, Hutchison Global Communications (HGC) into Vanda. The back-door listing was swiftly followed by a placement of two billion shares at 90 cents each, a steep discount of more than 40 per cent to Vanda's share price. Although it raised eyebrows at the time as a sweet bargain, by March last year the share price had dropped 22 per cent and investors were not looking too cheerful. On Tuesday, Hutchison Telecommunications International Ltd (HTIL) gave them a chance to exit. It plans to buy out the remaining stake in Vanda - now known as HGC - it does not already own for 65 cents a share. At a 36.8 per cent premium to the 47.5 cents HGC traded at before the stock was suspended on April 25, the offer looks good on paper. Stakeholders get an 'out' from a stock with limited trading liquidity and HTIL gets a simplified group structure. HGC was created through a back-door listing in January last year, with Hutchison injecting its fixed-line assets into Vanda in exchange for US$910 million in shares. HTIL was spun off from Hutchison in October last year, and already holds a 52.5 per cent stake in HGC. As one analyst put it: 'He (Mr Li) is doing a deal ... that's what they do all the time. This way, they sold high and are buying back low. For Hong Kong punters, they are getting an exit in cash. It's not too bad a deal for them.' Sources close to the deal have also been quick to note that shareholders are able to cash out at a premium. They are also being offered two HTIL shares for 21 HGC shares, potentially giving them a more active play. Those who felt they were buying into the famed Li Ka-shing financial mastery, however, may feel the tables have been somewhat turned on them. Taken historically, the price on the table is substantially less than the 90 cents at which Hutchison companies placed out HGC shares. While Hutchison used the cash to help stem losses at its third-generation mobile-phone business, less adroit investors were forced to dump the stock when the price subsequently took a dive. In a city renowned for dubious deals that turn a fast buck for those in the loop, shareholders in contrast believed HGC would deliver on the Li Ka-shing promise: that the tycoon would make them a lot of money, and that shareholder value and minority interests would not be an afterthought. Although they are not walking away from the experience empty-handed, it may be with a more sceptical view of the tycoon's financial prowess. In contrast to many of its peers, Hutchison has been a brand synonymous with adept deals, trades and a simple formula of 'buy low, sell high'. The reputation in turn has given the conglomerate - although bankers are fast to stress this deal in particular involves HTIL and not Hutchison itself - lucrative pricing power. As punters buy into the expectation of a good deal, Hutchison is able to price them accordingly. Recent experience, however, has seen the conglomerate losing some of its lustre. Experiences at other Li Ka-shing companies such as Tom.com and CK Life Sciences have of late been lacking in deals that are overtly in investors' interests, notes Webb-site.com editor David Webb. 'Perhaps it's a gold leaf rather than solid,'' Mr Webb said yesterday, referring to Mr Li's frequent 'Midas touch' tag. The HGC experience has smacked more of a fast grab for cash, leveraging the Hutchison name against investor appetite, than precious trades. They have thus had a tinge of opportunism or 'chancer' mentality attached to them, on the part of the conglomerate rather than the punter. 'It's a difficult one,' noted one banker close to the companies. 'What do you do? It's a delicate balancing act from a governance perspective,' he said, stressing that it was an issue of great sensitivity to the companies. On this occasion, he was dismissive of Machiavellian factors, dispelling theories that the course Vanda would take was charted from the outset. It was investment bankers who rather approached Hutchison on the HGC back-door listing and the subsequent privatisation is more a case of not wanting to leave HGC as 'a kind of orphan in the wilderness'. 'In a way, it's damned if you do, damned if you don't.'' It is, however, going to be further down the line that any damage to the reputation surfaces: whether or not Mr Li's companies can still command the same investor appetite and trust when he next brings a deal to market. The average punter may not give it too much thought before they jump on the Hutchison bandwagon, but institutional investors may be more wary: once bitten, twice shy.