Harbour centre Development

WHARF Holdings yesterday named its price in the privatisation of Harbour Centre Development.

The conglomerate has offered $9.00 per share for its hotel subsidiary at a total cost of $1.22 billion.

The price is at a 13 per cent discount to Harbour Centre's net asset value, which is estimated to be about $10.25, but at a 15 per cent premium to the firm's $7.85 closing price before suspension on Thursday.

It puts the firm on a price/earnings multiple of 18 times.

The acquisition will be financed by a placement of 65 million Wharf shares at $19.50 a share. Morgan Stanley Asia is to act as financial advisers to Wharf.

Harbour Centre has appointed Schroders to act as independent advisers to minorities.

Hongkong and Shanghai Hotels is believed to be one of the largest minority shareholders in Harbour Centre, holding more than 10 per cent of shares.

Wharf's executive director Mr John Hung said privatisation would channel more resources into existing hotels.