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Hutchison Whampoa considers possible IPO for Watson

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October 21
8:22 AM 2013

Hutchison Whampoa said it would consider an initial public offering for its AS Watson Group business. In a statement, the company owned by Asia's wealthiest man Li Ka-shing, said it was considering a spinoff of the business that would enable the company to hold a controlling stake. If the IPO would push through, Credit Suisse Group said Hutchison would be able to raise up to HKD 98 billion or USD 13 billion. This would make it the largest IPO in Asia after the share sale of AIA Group Ltd which gathered USD 20.4 billion.

According to a Bloomberg report, Hutchison was thinking of the share sale after it cancelled plans to sell its ParknShop chain. The spinoff was also considered after a review conducted by Hutchison's financial advisers.

UoB Kay Hian Director Steven Leung told Bloomberg by phone that a spinoff was the better choice for the firm. He said, "Hutchison Whampoa share price will be under pressure in short term to reflect the disappointment the investors have over its failed attempt to sell ParknShop. The spinoff of A.S. Watson would be a better option for Hutch in the long run as it could unlock a more attractive valuation given the assets are more appealing."

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