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Where the Hutch chairman smiles
By agencies
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Thursday, 04 January 2007, 18:30 IST
No matter which of the potential buyers acquires control of mobile firm Hutch Essar, the chairman Li Ka-shing, of Hutchison Whampoa will be richer by a few more billions. Selling his groups 67 percent stake in Hutch Essar, would keep the billionaire smiling for a longtime.
The potential buyers are increasing day-by-day, with two parties Reliance communications and the major mobile player Vodafone, already having confirmed bets of over $ 20 billion. Other possible buyers include Malaysias Maxis, Egypts Orascom and private equity funds.
The company is not accepting bids lower than $ 14 billion, taking the companys valuation to nearly $ 21 billion. It represents a huge premium since June last year when HTIL raised its stake in Hutch Essar by 5.11 percent for $ 450 million while valuing the company at less than $ 9 billion.
The original cost of Hutchison Whampoas investment in Hutch Essar is not known, but a good amount was regained when it successfully carried out the Hutchison Telecom initial public offering in Hong Kong and New York in October 2004.