Hong Kong tycoon Kadoorie to boost stake in Peninsula hotel operator for US$337 million, triggering a record stock rally

Agreement to buy additional shares in Hong Kong and Shanghai Hotels is subject to a waiver from making a takeover offer for the rest of company

The Kadoorie family also controls CLP, which supplies electricity to about 80 per cent of Hong Kong’s population

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The Peninsula Hotel in Tsim Sha Tsui, Kowloon. Photo by: Dukas/Universal Images Group via Getty Images

Published: 3:40pm, 17 Jan 2022Updated: 4:45pm, 17 Jan 2022

Billionaire Michael Kadoorie is paying almost double the market price to boost his family’s stake in the Hong Kong and Shanghai Hotels that owns the Peninsula hotel in the city. The stock surged by the most in more than two decades.

The family has agreed to buy 205.3 million shares from asset management group Seekers Capital Partners and other undisclosed sellers for HK$2.63 billion (US$337.5 million) or HK$12.80 per share, according to an exchange filing on Monday. The purchase will raise the family’s ownership in the hotel operator to 72.4 per cent from just under 60 per cent.

The transaction is conditional on getting a waiver from the Securities and Futures Commission from making a takeover offer for the rest of the company by March 31, unless extended by both parties.

Michael Kadoorie and son Philip photographed in Central, Hong Kong, in April 2021. Photo: Xiaomei Chen

The stock surged 19.5 per cent to HK$7.80 at the close of Monday trading, the most since a 21.7 per cent jump in February 1998. It earlier hit as high as HK$8.50. The stock traded at HK$6.65 on Friday, near a 14-month low, a deep discount to its tangible asset backing of HK$20-HK$24 per share over the past decade, according to Bloomberg data.

Seekers Capital Partners, formerly known as Satinu Resources Group according to Webb-Site database, purchased most of its shares in the hotel operator from its 74.9 per cent-owned unit Tai United Holdings in a June 2018 transaction, also at HK$12.80 per share, according to past company filings.

The Kadoorie family also derives its wealth from other business interests in Hong Kong including the holding company of China Light & Power, the electricity supplier founded by its Jewish Iraqi patriarch Elly Kadoorie in 1901.