Exclusive Negotiation Deadline for CKH and Port Transaction May Be Extended, Short-Term Completion of Talks Unlikely

The plan by Cheung Kong Holdings (CKH) to sell most of its $22.8 billion port business is unlikely to be finalized in the short term, with political maneuvering continuing, according to sources, who said the exclusive negotiation deadline set for Sunday may be extended.

Cheung Kong Holdings plans to sell its businesses, including two ports along the Panama Canal that hold significant strategic importance, to a consortium led by BlackRock and Mediterranean Shipping Company (MSC), a billionaire from Italy, Alessandro Aponte. In the context of escalating US-China trade tensions, this plan has become politicized. According to the terms announced in March, the transaction involves 43 ports in 23 countries, and Cheung Kong Holdings, founded by Hong Kong tycoon Li Ka-shing, is conducting exclusive negotiations with the consortium, which has a 145-day deadline that will end on Sunday (27th).

However, if an agreement is not reached before Sunday, the transaction is unlikely to fall apart. Three people close to CKH told Reuters that the deadline may be extended to continue the exclusive negotiations. The final documents for the first part of the transaction - the sale of the two port operations along the Panama Canal - also failed to be signed before the April 2nd deadline set by the sale announcement.

BlackRock declined to comment. CKH and MSC did not respond to requests for comment. Previously, CKH had stated in May that MSC was the main investor in the consortium. US President Trump praised the deal as a "reclamation" of the Panama Canal, following his administration's call to revoke Chinese ownership of ports near the canal.

However, at the end of April, China's State Administration for Market Regulation responded to questions, stating that all parties involved in the CKH port transaction must not take any measures to circumvent antitrust review, and pointed out, "We are highly concerned about the transaction and will conduct the review in accordance with the law. All parties involved must not take any measures to circumvent the review. No concentration shall be implemented before approval, otherwise legal liability will be assumed."

CKH stock surged by 33% within two days after the announcement in early March, but by mid-April, it had lost all the gains. However, since then, as the Hong Kong stock market index rose, CKH's stock also recovered its losses. Recently, the prospects for the transaction have become more complicated, with other sources telling Reuters that port operator China Ocean Shipping Company (COSCO) is also considering joining the consortium to acquire CKH's port business. Bloomberg reported this week, citing informed sources, that COSCO is applying for veto power or equivalent authority in the entity that will take over the 43 ports from CKH. COSCO did not respond to requests for comment.

Source: rfi

Original: https://www.toutiao.com/article/1838633378450442/

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