Chinese tycoon aims to expand control over Hong Kong tunnel with buyout plan
Shares for Hong Kong-listed investment holding company Cross-Harbour on Friday skyrocketed by some 40% following a buyout plan that would give its billionaire chairperson increased control over Hong Kong’s most expensive tunnel.
Chaired by Cheung Chung-kiu, the company owns a variety of transport infrastructure and related services, including a 50% stake in the entity that operates Western Harbour Tunnel, one of three cross-harbor tunnels in Hong Kong. It also has majority stakes in a local driving school and an electronic toll-collection service provider.
Cheung, also the chairperson of property developer CC Land, proposed to acquire all of Cross-Harbour’s shares for HK$4.03 billion (US$520 million).
Following Cheung’s plans, Cross-Harbour’s shares closed at HK$13.84 on Friday, up 40.79% from the previous closing of HK$9.83.
Cheung, who is often dubbed the “the Li Ka-shing of Chongqing,” is best known for building massive residential estates in the southwestern Chinese city, including its first large-scale residential project, California Garden.
He is also known for his pro-establishment views and his close links to some of Hong Kong’s property tycoons.
Cheung and the management team at Cross-Harbour have been criticized in the past for making poor investment choices and mismanaging the company.
Although his buyout plan came at a premium of 42% of its previous price, it is still 28.8% off the company’s net asset value of HK$19.66 per share. Cheung currently owns 22.69% of Cross-Harbour.
If the buyout proceeds, the 56-year-old and Chinese conglomerate CITIC group will own the majority of shares of Western Harbor Tunnel’s operator.
The Western Harbour Tunnel is the most expensive cross-harbor tunnel in Hong Kong. The government has said that its tolls could only be adjusted when its franchise rights expire in 2023.
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