CK Hutchison says may invite ‘major strategic investor' from China to join mega ports deal

Straits Times

28-07-2025

Beijing has viewed the deal as a threat to its interests because it would transfer two ports along the strategically important Panama Canal to the BlackRock-backed group.
HONG KONG – CK Hutchison Holdings said it may invite a 'major strategic investor' from China to join the buyer consortium in its plan to sell 43 ports, as investors regain confidence for the company's prospects of completing the troubled transaction.
The unnamed investor would join as a significant member of the consortium, the company said in a stock exchange filing on July 28.
'Changes to the membership of the consortium and the structure of the transaction will be needed for the transaction to be capable of being approved by all relevant authorities,' CK Hutchison said, adding that it 'intends to allow such time as is required for such discussions.'
Shares of the firm, which oscillated between gains and losses since the company first announced the deal on March 4, reached the highest this year on Friday (July 25) after Bloomberg News reported that state-owned China Cosco Shipping is set to join the buyer consortium that includes US asset manager BlackRock.
Although a 145-day exclusivity window for talks between CK Hutchison and the original buyers' group lapsed on July 27, the company's confirmation that a Chinese investor will join is likely to boost expectations.
Beijing has so far viewed the deal as a threat to its interests because it would transfer two ports along the strategically important Panama Canal to the BlackRock-backed group, which China sees as a proxy for American influence. US President Donald Trump hailing the transaction as a win for the United States did not help.
'Ongoing negotiations and the reported inclusion of Cosco Shipping in the consortium have likely eased concerns over Chinese regulatory hurdles, strengthening investor confidence in the deal's viability,' according to Bloomberg Intelligence analyst Denise Wong.
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China separately warned the parties involved not to bypass antitrust reviews, so as to prevent them from rushing into a deal. As of last week, the buyers' group was considering China Cosco's demand for veto rights to secure Beijing's interests, Bloomberg News reported.
CK Hutchison's shares, which shot up 37 per cent in the days following the sale announcement in March, saw political pressure wipe out all the gains in the space of a month. The stock started rallying again in June as investors flocked back after China Cosco came into play.
The share price recovery shows investors are increasingly betting on Li Ka-shing, the 96-year-old founder of CK Hutchison, to seal the deal of his lifetime. If it goes through, the sale will net the group more than US$19 billion (S$24.3 billion) in cash. The renewed optimism is largely due to China Cosco's interest in playing a role in the buying consortium, alongside BlackRock and Italian billionaire Gianluigi Aponte's Terminal Investment.
Challenges remain even as Cosco enters the discussions, David Blennerhassett, an analyst at Quiddity Advisors, wrote on financial analysis platform SmartKarma. That could reverse the current rhetoric and upset Mr Trump, who has a handful of issues already on his plate, he said. CK Hutchison's share price could also be under pressure should talks on the sale drag on, he added.
Investors will be watching out for more answers to questions surrounding the deal, including what role the Chinese side will play in the consortium, said Gary Ng, a senior economist at Natixis.
The controversial deal has also weighed on Mr Li and his family's other businesses. Younger son Richard's talks to expand his insurance business into mainland China have stalled after the ports deal upset Beijing, Bloomberg reported earlier in July. That followed another Bloomberg report in March that China told its state-owned firms to hold off on any new collaboration with businesses linked to the Li family.
The original structure of the buyer consortium was designed to give the Aponte family-controlled Terminal Investment ownership of all the ports except the two in Panama, whose control will go to BlackRock's Global Infrastructure Partners unit. BLOOMBERG