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Peggy Sito

Shares of Henderson Investment  rose 8.37 per cent to close at HK$13.98 yesterday after the company said it would pay a special dividend on completion of a  proposed HK$42.86 billion stake sale of Hong Kong and China Gas (Towngas) to parent Henderson Land Development.
Shareholders of  Henderson Investment  will get 0.209 Henderson Land share and HK$1.21 in cash for each share they own, the companies said  yesterday.
The value of the payout equals  HK$14.71 per share or 13.7 per cent higher than the 10-day moving average of Henderson Investment's stock.
The deal will enable Henderson Land, controlled by billionaire Lee Shau-kee, to directly own the piped-gas supplier and may lead to a third attempt to privatise  Henderson Investment after two failures.
'Mr Lee  has always wanted his favourite, Towngas, to come directly under the control  of his flagship [Henderson Land]. There may be some  valuable assets in Towngas that we have not yet recognised,' said an analyst at a US brokerage firm.
Henderson Land earlier this year spent HK$12.11 billion buying  stakes in other key  assets under Henderson Investment, including Hong Kong Ferry (Holdings) and Miramar Hotel & Investment.
Eric Wong, a property analyst at UBS, said Henderson Land would find it easier to win approval from  Henderson Investment minority shareholders  for the Towngas stake than buying out Henderson Investment.
This is  because an asset sale only needs to be approved by a simple majority of independent shareholders, while privatisation can be voted down by just 10 per cent of them.
Analysts said Henderson Land hoped to complete the purchase of the Towngas stake before the Securities and Futures Commission tightened the rules on asset sales.
In a consultation paper released last month, the SFC suggested changing the Takeovers Code to treat transactions involving substantial asset  sales under the same rules covering privatisation  to 'enhance fair treatment of shareholders and meet market needs for greater clarity'.
In the Towngas deal, Henderson Land will pay Henderson Investment HK$3.7 billion in cash plus HK$39.15 billion worth of share-entitlement notes, which will give rights to the land developer's shares.
Henderson Investment will then distribute the cash and note payment to its shareholders. Henderson Land, which owns 68 per cent of Henderson Investment, will take  HK$2.505 billion in cash but  scrap the notes it is entitled to receive.
The rest of the notes represents 204.2 million Henderson Land shares or about 9.51 per cent of its enlarged issued share capital. Mr Lee's stake in Henderson Land will fall  to 52.44 per cent  from 57.52 per cent.
Henderson Land's  shares  fell  3.65 per cent to HK$59.40 yesterday, while shares of Towngas rose 8.95 per cent to HK$19.72.
Share booster
Henderson Investment's special dividend plan lifted its shares 8.37pc
The value per share of Henderson Investment's dividend payout, in HK$14.71



Henderson  mulls special payout after Towngas deal