SF Holding Offers to Take Kerry Logistics Under Its Wing

The proposal, which would create the largest logistics operator in Asia, is worth HK$17.6 billion ($2.27) billion.
Anthony RussoFeb 10,2021,15:30

Shenzhen-listed S.F. Holding Co. has proposed to buy a majority stake in fellow logistics firm Kerry Logistics Networks (HKEX: 00636).

S.F., China's second-largest delivery network that includes air freight, has proposed to buy the stake in Kerry at HK$18.8 per share, valuing the deal at HK$17.6 billion ($2.27 billion), according to a filing cited by Reuters today. That represents a 20% discount from Feb. 4, which was its last close before a trading halt.

However, Kerry resumed trading today and jumped as high as HK$25.90 per share on the news, marking a new all-time high for the company. Kerry has been listed in Hong Kong since December 2013.

The deal, which would give S.F close to a 52% stake, would not lead to Kerry’s privatization. Instead, Kerry’s public float would be reduced from 25% to 15%.

Under the deal, Kerry would operate as S.F.'s international arm. The partnership would create the largest logistics operator in Asia.

“We have been communicating with each other for three years. We think the transaction will benefit us in the future competition in the sector,” Dick Wong, the chairman of S.F., said.

Separately today, Kerry Logistics said it will declare a special dividend of HK$7.28 per share after it completes the sale of its warehouse assets to parent Kerry Holdings for HK$13.5 billion ($1.74 billion). As a result of the warehouse sale, Kerry would become an asset-light firm, according to managing director William Ma.

Both the equity and warehouse deals are subject to the approval of shareholders. Ma said global regulatory approval is expected to take six months to finalize.

At the close of trading Wednesday, Kerry’s stock was up 6% at HK$24.75 per share. So far, Kerry is off to a hot start in 2021, with shares up 45% year-to-date.

Topics:S.F. Holding, Kerry Logistics.