Hong gone but not forgotten

8 March 2021 By Jennifer Hughes Follow @JennHughes13

The Mandarin Oriental owner will pay $5.5 bln to buy out its fellow holding company, unwinding a 1980s-era structure designed to fend off tycoons like Li Ka-shing. A low valuation and cheap funding make it a smart time for the storied Hong Kong trading house to reduce complexity.

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Singapore-listed Hong Kong-based Jardine Matheson on March 8 announced an offer to buy the 15% it does not own of Jardine Strategic. The purchase of stock for $5.5 billion, will simplify the group’s holding company structure.

Jardine Matheson will pay $33 per a share, or a 20% premium to the closing price on March 5. The deal unwinds a structure developed in the 1980s to fend off attacks from fellow tycoon Li Ka-shing.

Separately, Jardine Strategic owns 59% of Jardine Matheson. Jardine Strategic shares rose almost 20% to $32.81 in morning trade in Singapore following the announcement.

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