Not vested.
Li & Fung share sale to Temasek unit raises $3.9b
Alfred Liu
Li & Fung (0494), a Hong Kong-based consumer goods exporter, said it will raise HK$3.9 billion to finance acquisitions by selling 168 million new shares at HK$23.09 each to a subsidiary of Temasek Holdings.
The subscription shares amounted to 4.62 percent of Li & Fung's enlarged share capital and 4.85 percent of its existing issued share capital as of yesterday.
The subscription price is at a 2.39 percent premium to last Friday's closing price of HK$22.55 per share, down 2.38 percent from the previous day.
Dunearn Investments, a wholly owned subsidiary of Singaporean state investment company Temasek, undertakes not to sell the shares for one year.
"We have no doubt that this strategic investment by Temasek will be of benefit to Li & Fung's activities in Asia and will further enable us to take advantage of any acquisition opportunities that may arise in this economic environment," said William Fung Kwok-lun, group managing director of Li & Fung.
Temasek and subsidiaries including Dunearn will hold 180.6 million shares, or 4.97 percent after the subscription.
Li & Fung last month reported worse-than-expected first-quarter net profit growth of 18 percent to HK$1.24 billion, and key brokerages cut the company's target price as a result.
Credit Suisse slashed its Li & Fung target price to HK$26.94, from HK$31.38, following a slowdown in US consumption. Morgan Stanley cut its target to HK$36 from HK$39, due to heightened market risks.
Li & Fung last month announced its takeover of New York-based handbag importer Van Zeeland for US$330 million (HK$2.58 billion).