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Family Business Roundup: Hutchison Whampoa and Samsung

Li Ka-shing restructures business empire, shares soar; Samsung crushes rumours of $7.5 billion Blackberry bid

Li Ka-shing restructures business empire, shares soar

Share prices at Hong Kong-based conglomerate Hutchinson Whampoa and property giant Cheung Kong Holdings rose dramatically on Monday following reports of a multi-billion dollar corporate restructure by owner Li Ka-Shing.

As a result, Cheung Kong's shares were up in Hong Kong as much as 14% in afternoon trading on Monday, while Hutchison Whampoa's shares surged more than 12%. 

The $24 billion [€20.7 billion] project will restructure assets of the companies into two new entities. All of the real estate assets of Cheung Kong and Hutchinson Whampoa will be transitioned into Cheung Kong Property Holdings, while non-property assets will be transitioned into CK Hutchinson Holdings.

According to a press release, the restructuring programme should immediately realise value for shareholders through the elimination of tiered shareholding structures and will reportedly increase transparency and cohesion within the group.

“After completion of the proposals, CK Hutchinson Holdings will be a multinational conglomerate of significant size and scale, operating in over 50 countries,” the statement said, adding that the deal would make it easier for shareholders to choose which businesses they wanted to invest in.

Under the revamp, the two new companies will relocate from Hong Kong to the Cayman Islands in order to better distribute cash to shareholders. The deal is thought to be the first step by Ka-shing towards increasing his overseas acquisitions.

The new structures, CK Hutchinson Holdings and Cheung Kong Property Holdings, are expected to be in place by June, if shareholders and the courts approve the deal. 

The 86-year-old is also likely to regain his spot as Asia’s richest person following the surge in share price, putting him on track to become the 15th richest person in the world.

Ka-shing has an estimated personal fortune of $33.5 billion, according to Forbes.

Samsung crushes rumours of $7.5 billion Blackberry bid

South Korea’s Samsung has denied rumours of a proposed $7.5 billion dollar take over of smartphone maker BlackBerry in a bid that will boost its patent portfolio, according to Reuters.

“Media reports of the acquisition are groundless,” a Samsung spokeswoman told Reuters on Thursday, mirroring a statement from BlackBerry suggesting that no talks had taken place.

The original story, which cites an anonymous source familiar with the matter, as well as leaked documents, caused share prices at the Canadian smartphone maker to jump by as much as 30%.

Nevertheless, some pundits have claimed that the $7.5 billion bid vastly undervalues BlackBerry’s patent portfolio, yet have suggested that the deal could still go ahead if the two firms renegotiated terms.

Samsung and BlackBerry already have lucrative partnership, agreed upon last November, which allows the South Korea’s biggest Chaebol to use BlackBerry’s sophisticated security systems on its flagship Galaxy smartphones. 

BlackBerry has been struggling in recent years to compete with more popular devices, including Apple’s iPhone and Google’s Android, yet its security systems remain extremely popular. 

Following the hack of Sony by North Korea, Sony executives were forced to rely upon BlackBerry phones because they still remain unmatched for security. President Barack Obama, despite being a fan of the iPhone, is required by the secret service to use a BlackBerry, as they offer greater security than competitors.

Samsung was founded by Lee Byung-chul in 1938, and has made the Lee family one of the wealthiest in the world, with today’s family members worth a reported $12.6 billion (€9.3 billion).

The Chaebol posted revenues of $208 billion in 2013 and controls approximately one third of the global smartphone market, although it recently forecast a 37% drop in quarterly profits.

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