After initially planning a dual London-Hong Kong listing for 2014, Li Ka-shing’s Hutchinson Whampoa Ltd. has agreed to instead sell 25 percent of beauty retailer A.S. Watson Co. to Singapore’s state-owned Temasek Holdings Pte. Ltd. At $5.7 billion, the deal is Temasek’s largest to date, according to Bloomberg.
The Temasek-Watson deal comes in the wake of Hutchinson Whampoa’s push for a combined $5 billion share sale on the Hang Seng and FTSE 100 indices, according to the Financial Times. While Li has said that a Watson initial public offering (IPO) is unlikely this year, a statement released by Hutchinson Whampoa says that Temasek and Hutchinson Whampoa will “work together toward listing A.S. Watson at a suitable time.” It is still uncertain where that IPO would take place.
When the Temasek transaction is completed in April, Hutchinson Whampoa will pay out two-thirds of sale proceeds to its shareholders in the form of a special dividend. The remaining proceeds will be put toward working capital to help Watson achieve its goal of opening up more than 1,200 stores globally. Watson currently has 11,000 outlets worldwide that generated $19.2 billion in revenue last year.