Li Ka-shing’s CK Hutchison spins off global telecom assets listed in London.

Hong Kong billionaire Li Ka-shing’s conglomerate, CK Hutchison Holdings, is considering splitting its global telecommunications assets and listing them in London, according to sources cited by Reuters.

The report on Friday, March 28, stated that CK Hutchison has been in discussions with a small group of financial advisers regarding this plan. The listed entity post-split would hold the telecommunications businesses of CK Hutchison in Europe, Hong Kong, and Southeast Asia, with an estimated valuation ranging between £10 billion ($13 billion) and £15 billion ($19.4 billion).

Insiders mentioned that CK Hutchison initially planned to list in London earlier this year, but due to the complexity of the transaction, the listing timeline may be delayed.

A spokesperson for CK Hutchison declined to comment on the matter.

The potential listing of CK Hutchison could become one of the largest IPO activities on the London Stock Exchange in recent years, boosting the exchange’s standing. The UK has initiated comprehensive reforms to enhance the attractiveness of London listings for businesses.

Sources indicated that untangling CK Hutchison’s telecommunications assets is a massive undertaking involving diverse markets and distinct equity structures.

The sources added that the preparation for the split is in its early stages and may undergo changes based on the restructuring process, requiring shareholder approval.

The telecommunications division of CK Hutchison is the most profitable segment of the group, contributing a quarter of its operating profit in 2024.

CK Hutchison has recently drawn media attention after it announced in early March the sale of a significant portion of its global port business to a consortium led by U.S.-based BlackRock. While this constitutes a small part of CK Hutchison’s operations, the sale involving two ports at the Panama Canal has attracted criticism from the Chinese government.

The South China Morning Post reported on Friday, citing sources, that CK Hutchison will not officially sign the agreement to sell its two strategic ports at the Panama Canal next week, as expected on April 2.

April 2 is not the “true final deadline” for CK Hutchison to finalize the deal with BlackRock, but rather the earliest possible date for the agreement to be signed.

A source close to CK Hutchison informed the South China Morning Post, “The formal signing of the deal for the two ports in Panama will not happen next week.”

The total value of this transaction amounts to $23 billion, with CK Hutchison set to receive $19 billion in cash proceeds.

Reports suggest that the current situation does not imply the cancellation of the deal but that crucial details still need to be ironed out due to the complexity of the transaction.

China’s State Administration for Market Regulation announced on Friday that it will conduct an “antitrust” investigation into CK Hutchison. Mainland financial analysts believe that China’s so-called “antitrust” probe is a ploy to pressure Li Ka-shing.

Bloomberg reported that Li Ka-shing’s business conglomerate focuses on retail, telecommunications, ports, and utility industries, with only 12% of its revenue from mainland China and Hong Kong. Li Ka-shing’s private investment arm, Horizons Ventures, is also dedicated to overseas ventures. Furthermore, for the Li Ka-shing conglomerate, the $19 billion cash return from selling the ports, compared to potential future business dealings with Chinese entities, is a significant positive.

Reuters cited insiders who mentioned that the port transaction could potentially divert attention from CK Hutchison’s ongoing split plans, as the company needs to address regulatory and geopolitical uncertainties.