Deacons is advising on the proposed privatisation of Wheelock and Company Limited (stock code: 00020) (Wheelock) announced on 27 February 2020.
Wheelock is one of Hong Kong’s oldest listed property companies. It is also the holding company of The Wharf (Holdings) Limited (stock code: 00004) (Wharf), Wharf Real Estate Investment Company Limited (stock code: 01997) (Wharf REIC) and Harbour Centre Development Limited (stock code: 00051), all of which are listed on the Hong Kong Stock Exchange.
The Proposal comprises of a pro-rata distribution-in-specie by Wheelock of the shares it holds in Wharf and Wharf REIC, and a proposed privatization of Wheelock by Mr. Peter Woo by way of a scheme of arrangement under section 673 of the Companies Ordinance.
In brief, subject to fulfilling the conditions for the distribution and for the scheme respectively, Wheelock’s scheme shareholders will, for each Wheelock share, receive one Wharf share + one Wharf REIC share + a cash consideration of HK$12.0, which have a combined value of HK$71.9 (based on the latest closing price of Wharf and Wharf REIC prior to their trading halts). On this basis, the Proposal involves a total consideration of over HK$47.5 billion, of which about HK$8.15 billion is in cash.
The effect of the Proposal, from the perspective of the Wheelock scheme shareholders, is a demerger of Wheelock by way of distributing Wharf and Wharf REIC shares, alongside a privatisation offer from Mr. Peter Woo for the remaining assets held by Wheelock. The Proposal aims to eliminating the holding company discount of Wheelock’s stake in Wharf and Wharf REIC, thereby unlocking value for Wheelock shareholders.
This is one of the most sizable and high profile privatisations in Hong Kong.
We have in the past advised on a few significant corporate transactions involving Wheelock group and other investments of Mr. Peter Woo’s related trusts, including the divestment of Wharf T&T (which earned the M&A Deal of the Year) and i-CABLE Communications Limited, the spin-off listing of Wharf REIC (Harbour City, Times Square and other HK investment properties), as well as the recently announced proposed privatisation of Joyce Boutique. We also advised on the successful privatisations of Lane Crawford Limited and Wheelock Properties Limited.