Cheung Kong Infrastructure Holdings has lifted its offer for Power Assets Holdings in a move to win approval of the proposed merger from Power Assets' minority shareholders.
CKI, the infrastructure arm of Li Ka-shing's flagship CK Hutchison, on Wednesday proposed raising the merger ratio to 1.066 CKI shares for one Power Asset share, compared with the original ratio of 1.04 announced on September 8.
The proposed special dividend is to be raised to HK$7.50 a share, 50 per cent more than the originally proposed special interim dividend of HK$5 a share for all CKI shareholders post-merger. The dividend payment is subject to the reorganisation proposal becoming effective and approval from Power Assets minority shareholders.
CKI said the revised offer, announced last night, was made after taking into account feedback from shareholders.
The sweetened offer is in line with the expectations of analysts, who had predicted that the original offer was not attractive enough to win support from Power Assets' minority shareholders.
Commenting on the revised offer, analysts said that it would enhance the chances of the merger proceeding.
Simon Powell, head of Asian utilities research at UBS, said the revised merger ratio of 1.066 was better, but still lower than the multiple of 1.13 implied by his HK$80 target price for Power Assets and HK$71 target price for CKI, and multiples of 1.2 to 1.3 according to the two firms' historical share prices.