Li infrastructure unit lines up for 1.5b power bid

Li infrastructure unit lines up for 1.5b power bid

Staff reporter

Monday, September 10, 2007

Cheung Kong Infrastructure (1038), the infrastructure arm of Li Ka-shing's Hutchison Whampoa (0013), is making a 1.5 billion (HK$23.61 million) offer for the former Norweb electricity distribution business held by United Utilities, according to a London report.

The Sunday Telegraph said CKI is "understood to be among a number of suitors preparing first-round offers for the network, which delivers electricity to some 2.2 million customers in northwest England."

Hutchison Whampoa has amassed a portfolio worth around 15 billion, making Li Asia's biggest investor in Britain, the paper said.

CKI is the largest publicly listed infrastructure company in Hong Kong with interests in energy, transport and water. It also operates in the mainland, Canada, Britain, the Philippines and Australia.

Hutchison's investments stretch from the mobile phone network 3, and health and beauty chain Superdrug, to the ports of Felixstowe and Harwich, and Cambridge Water, the paper said.

CKI chairman Victor Li Tzar-kuoi said in June the company will "acquire the right assets at the right price."

According to the paper, United Utilities appointed Deutsche Bank to advise it on the sale of the electricity business earlier this year.

"It is understood that United Utilities is keen to retain the operating contract of the business, a move that could put off rival utilities such as Scottish & Southern Energy from bidding. Other interested groups are understood to include the infrastructure funds of JPMorgan and UBS, as well as Macquarie, the Australian financial group, and MidAmerican, the US utility," the newspaper said.

In the first half, CKI reported profit of HK$2.018 billion, up 27 percent over the same period last year.

Hutchison slid HK$1.70, or 2.19 percent, to close at HK$75.90 on Friday while CKI climbed HK$0.60 per share, or 0.52 percent, to HK$116.60.