China's S.F. offers to buy 51.8% stake in Kerry Logistics (updated)

KLN Logistics

10/02/2021 04:31

(Adds deal details, quotes from presser, shares move)
    By Meg Shen and Kane Wu
    HONG KONG, Feb 10 (Reuters) - Chinese logistics giant S.F.
Holding Co  002352.SZ  has offered to buy a 51.8 percent stake
in Hong Kong-listed Kerry Logistics Networks Ltd  0636.HK , it
said in an exchange filing on Tuesday.
    The offer, at HK$18.8 ($2.43) per share and valuing the
total transaction at HK$17.6 billion, will be conducted by S.F.
Holding unit Flourish Harmony Holdings Co Ltd, it said in the
filing. The price represents a 19.83% discount to the stock's
last close of HK$23.45 on Feb.4, prior to a trading halt.
    Kerry Logistics Networks will retain its listing on the Hong
Kong stock exchange upon completion of the deal, S.F. Holding
said, although the public float would be reduced to 15% of the
company from 25%.
    Kerry Logistics said it will separately declare a special
dividend of HK$7.28 per from the sales of its warehouse assets
for HK$13.5 bln ($1.74 bln) to parent company Kerry Holdings.
The company will also sell its Taiwan operations to the parent.
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    Kerry Logistics shares rose as much as 10.4% to HK$25.90
Wednesday morning, their highest since listing in December 2013.
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    The planned deal comes amid consolidation in China's
logistics sector since late last year, a development sparked by
the country's e-commerce boom during the COVID-19 pandemic.
    Kerry will become S.F.'s international arm after the
transaction is completed and together the companies will become
Asia's biggest logistics operator, executives from both
companies said at a Wednesday presser.
    "We have been communicating with each other for three years.
We think the transaction will benefit us in the future
competition in the sector," said Dick Wong, S.F.'s chairman.
    Kerry Logistics will become an asset-light company after the
sale of its warehouses, said its group managing director William
Ma.
    S.F.'s purchase of the controlling stake, as well as Kerry
Logistics' assets sale, are subject to shareholder approval.    
Global regulatory approval is expected to take six months to
complete, with S.F. officially starting its offer period in the
fourth quarter, Ma said.    
    Reuters previously reported that S.F. Holding was in talks
to take Kerry private at a premium to Kerry's trading price.
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($1 = 7.7516 Hong Kong dollars)

 (Reporting by Meg Shen and Kane Wu in Hong Kong; Roxanne Liu in
Beijing; Editing by Kirsten Donovan and Jane Wardell)
 ((meg.shen@thomsonreuters.com; 852-39525805;))