Henderson Land Development
Encyclopedia
Henderson Land Development Co. Ltd. (Chinese:) is a listed property company and a constituent of the Hang Seng Index
. The company's principal activities are property development and investment, project management, construction, hotel operation, department store operation, finance, investment holding and infrastructure. It is the third largest Hong Kong real estate developer by market capitalisation.
The company is controlled by Dr Lee Shau Kee
, who speaks for approximately 61.88% of the share capital as at 30 June 2006
Net asset value
(NAV) in 2005: HKD 66,698,980,000;
Net Profit in 2005: HKD 10,853,521,000
(38.46%), Miramar. Hotel and Investment Co, Ltd (44.21%) and Hong Kong Ferry (31.33%) are held by its listed subsidiary, Henderson Investment. The Company controls the composition of the boards of these associates, and Li is the chairman of the board in all these cases.
("HI") is a 73.5% listed subsidiary of the Company (67.14% as at 30 June 2006), which holds the group stakes in the Hong Kong Ferry (Holdings) Company, the Miramar Hotel Group, and The Hong Kong and China Gas Company. Its shares have been consistently trading at below NAV.
to back the buyout. Nevertheless, this second offer was again rejected, more narrowly this time, by 10.94% of the minority vote. This was in excess of the statutory blocking vote of 10%.
When trading in both companies' shares were suspended on 26 March, there was speculation that the Company would launch another buyout attempt after the expiry of the one year legal moratorium.
On 27 March 2007, it was reported that the Company would not make another privitisation bid for the time being, but offered HK$12.1 billion for some of its subsidiary's assets, principally the holdings in Miramar Hotel and Hong Kong Ferry held by Henderson Investment. HI would make a special distribution of HK$5 per HI after the sale. Net of the HKD10.35 billion special distribution for its 73.5% stake, Henderson's net cash outlay will be $1.75 billion.
On 3 October 2007, the company proposed to pay market value only to gain control of Towngas. It would acquire the 39.06 percent stake in Towngas held by subsidiary Henderson Investment for HK$42.86 billion in cash and convertible notes. Minority shareholders of Henderson Investment, who together hold 30.73%, would receive 204.1 million Henderson Land shares and HK$1.19 billion in cash. The offer was considered by analysts to be favourable to the Company, and David Webb
criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any control premium
to minority shareholders of Henderson Investment. Webb further criticised the nature of the offer as a back-door privatisation of Henderson Investment, which would virtually be a shell company after the transfer of the stake.
On 7 November, Henderson sweetened the offer to appease minority shareholders (mainly Elliott Capital) by increasing the cash portion to HK$2.24 per share. On 7 December 2007, Henderson secured shareholders' support for the usurpation.
, Sunlight. However, the issue fell by 6.5% on its market début on 21 December, and as at March 2007 has fallen 16.2 percent (since the listing) due to investors' apprehension of financial engineering of the REIT.
The estimated distribution yield stands at 10%, the highest among Hong Kong REITs. Yet, investors fear a decline of distribution after yield-boosting mechanisms, such as interest swaps. Henderson Land also offered a temporary dividend waiver as a sweetener. Yields are expected to fall in 2010, and again in 2012 as rental reversions come through. The issue's flop was cited as the reason Regal Hotels International
chose to delay its own planned REIT offering.
and MTR Corporation
, the company developed the International Finance Centre
complex, which includes the landmark waterfront property and tallest building in Hong Kong, completed in 2003. Since its completion, the company has its headquarters in the building.
had reasonably exercised his discretionary powers to exempt the area of a public transport terminus in the gross floor area calculation of the development. The effect was to allow the addition of 10,700 square meters to the project and doubling the number of apartments from 1,008 to 2,020, costing the government HK$125 million in lost revenue.
In November 2005, the Audit Commission accused Leung of not conferring with other government departments before exercising his discretionary power, thus handing the developer an additional HK$3.2 billion. Leung tabled a judicial review. The two sides reached a deal in May 2006 when the Commissioner dropped legal proceedings, and Leung abandoned his judicial review.
is a residential development by the company situated in the mid-levels in Hong Kong
. Soon after the development was launched in October 2009, the developer claimed to have sold a five bedroom duplex flat, on the "68th floor" of the 46-storey the building for HK$
439 million (US$57m). The price, equating to US$9,200 per square foot, set the new world record for the most expensive apartment.
Due to selective numbering, a total of 42 intermediate floor numbers are missing from 39 Conduit Road: these include 14, 24, 34, 64, all floors between 40 and 59. The floor above the 68th is the 88th. The Democratic Party accused the developer of misleading; the Consumer Council recognised the accepted common practice of skipping the 13th and 14th floors, but suggested that developers "imaginary heights brought back to earth." Lee Shau Kee argued that buyers liked the numbering scheme.
Hang Seng Index
The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong...
. The company's principal activities are property development and investment, project management, construction, hotel operation, department store operation, finance, investment holding and infrastructure. It is the third largest Hong Kong real estate developer by market capitalisation.
The company is controlled by Dr Lee Shau Kee
Lee Shau Kee
Lee Shau-kee GBM is a property developer and majority owner of Henderson Land Development , a property conglomerate with interests in properties, hotels, restaurants and internet services...
, who speaks for approximately 61.88% of the share capital as at 30 June 2006
Net asset value
Net asset value
Net asset value is a term used to describe the value of an entity's assets less the value of its liabilities. The term is most commonly used in relation to open-ended or mutual funds because shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net...
(NAV) in 2005: HKD 66,698,980,000;
Net Profit in 2005: HKD 10,853,521,000
Subsidiaries and Associates
The company's stakes in its principal associates, TowngasThe Hong Kong and China Gas Company Limited
The Hong Kong and China Gas Company Limited , commonly known as Towngas, is the sole provider of towngas in Hong Kong. Founded in 1862, it is one of the oldest listed companies in the territory....
(38.46%), Miramar. Hotel and Investment Co, Ltd (44.21%) and Hong Kong Ferry (31.33%) are held by its listed subsidiary, Henderson Investment. The Company controls the composition of the boards of these associates, and Li is the chairman of the board in all these cases.
Henderson Investment
Henderson InvestmentHenderson Investment
Henderson Investment Limited , the subsidiary company of Henderson Land Development, involves the development, investment and leasing of the properties in Hong Kong and Mainland China...
("HI") is a 73.5% listed subsidiary of the Company (67.14% as at 30 June 2006), which holds the group stakes in the Hong Kong Ferry (Holdings) Company, the Miramar Hotel Group, and The Hong Kong and China Gas Company. Its shares have been consistently trading at below NAV.
Privatisation attempt
In November 2002, the company attempted to buy out minority shareholders by making an all-cash offer of HKD 7.60, representing a 40% discount to NAV. The buyout offer fell when it was opposed by more than 14% of the holders of the outstanding shares. In November 2005, it made another attempt when it offered one share for every 2.6 share in HI, although the offer was subsequently sweetened to 2.5 shares. The revised deal valued HI at an 18% discount to its net asset value. The company had persuaded shareholder Templeton InvestmentFranklin Templeton Investments
Franklin Resources Inc. is a holding company which, together with its subsidiaries, is referred to as Franklin Templeton Investments; it is an investment firm originally founded in New York in 1947 as Franklin Distributors, Inc. It is listed on the NYSE under the ticker BEN, in honor of Benjamin...
to back the buyout. Nevertheless, this second offer was again rejected, more narrowly this time, by 10.94% of the minority vote. This was in excess of the statutory blocking vote of 10%.
Miramar and HK Ferry
When trading in both companies' shares were suspended on 26 March, there was speculation that the Company would launch another buyout attempt after the expiry of the one year legal moratorium.
On 27 March 2007, it was reported that the Company would not make another privitisation bid for the time being, but offered HK$12.1 billion for some of its subsidiary's assets, principally the holdings in Miramar Hotel and Hong Kong Ferry held by Henderson Investment. HI would make a special distribution of HK$5 per HI after the sale. Net of the HKD10.35 billion special distribution for its 73.5% stake, Henderson's net cash outlay will be $1.75 billion.
Towngas
On 3 October 2007, the company proposed to pay market value only to gain control of Towngas. It would acquire the 39.06 percent stake in Towngas held by subsidiary Henderson Investment for HK$42.86 billion in cash and convertible notes. Minority shareholders of Henderson Investment, who together hold 30.73%, would receive 204.1 million Henderson Land shares and HK$1.19 billion in cash. The offer was considered by analysts to be favourable to the Company, and David Webb
David Michael Webb
David Michael Webb , usually known as David Webb, is a well-known activist and share market analyst in Hong Kong. He is a retired Investment Banker, and now devotes much of his time to advocating solutions for better corporate and economic governance in Hong Kong...
criticised the deal saying Henderson was acquiring the stake on the cheap, without paying any control premium
Control premium
Control premium is an amount that a buyer is usually willing to pay over the current market price of a publicly traded company. Contrary to a widely held view, this premium is not justified by the expected synergies, such as the expected increase in cash flow resulting from cost savings and revenue...
to minority shareholders of Henderson Investment. Webb further criticised the nature of the offer as a back-door privatisation of Henderson Investment, which would virtually be a shell company after the transfer of the stake.
On 7 November, Henderson sweetened the offer to appease minority shareholders (mainly Elliott Capital) by increasing the cash portion to HK$2.24 per share. On 7 December 2007, Henderson secured shareholders' support for the usurpation.
Sunlight REIT
On 8 December 2006, the company spun off and listed 12 office and 8 retail properties in Hong Kong into a Real Estate Investment TrustReal estate investment trust
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors...
, Sunlight. However, the issue fell by 6.5% on its market début on 21 December, and as at March 2007 has fallen 16.2 percent (since the listing) due to investors' apprehension of financial engineering of the REIT.
The estimated distribution yield stands at 10%, the highest among Hong Kong REITs. Yet, investors fear a decline of distribution after yield-boosting mechanisms, such as interest swaps. Henderson Land also offered a temporary dividend waiver as a sweetener. Yields are expected to fall in 2010, and again in 2012 as rental reversions come through. The issue's flop was cited as the reason Regal Hotels International
Regal Hotels International
Regal Hotels International is the largest hotel group in Hong Kong. Regal Hotels International Holdings Limited is a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange...
chose to delay its own planned REIT offering.
International Finance Centre
In a joint venture with Sun Hung KaiSun Hung Kai
Sun Hung Kai Properties Ltd. is a listed corporation based in Hong Kong. The company is controlled by the family trust set up by Kwok Tak Seng, who founded the company.-History:...
and MTR Corporation
MTR Corporation
MTR Corporation Limited is a company listed on the Hong Kong Exchange and included in the Hang Seng Index. MTR owns and runs the Hong Kong MTR metro system, and is also a major property developer and landlord in Hong Kong...
, the company developed the International Finance Centre
International Finance Centre
The International Finance Centre is an integrated commercial development on the waterfront of Hong Kong's Central District....
complex, which includes the landmark waterfront property and tallest building in Hong Kong, completed in 2003. Since its completion, the company has its headquarters in the building.
Grand Promenade
Henderson Land won a tender for a site in Sai Wan Ho for Grand Promenade with a land premium of HK$2.43 billion in January 2001. Six months later, the developer successfully applied for and was granted permission to exclude the public transport terminus from the gross floor area in its building plan. The ensuing controversy which was caused when the Government maintained that former Director of Building Authority Leung Chin-manLeung Chin-man
Leung Chin-man JP is a retired senior civil servant in the Government of Hong Kong the former Permanent Secretary for Housing, Planning and Lands.-Government career:...
had reasonably exercised his discretionary powers to exempt the area of a public transport terminus in the gross floor area calculation of the development. The effect was to allow the addition of 10,700 square meters to the project and doubling the number of apartments from 1,008 to 2,020, costing the government HK$125 million in lost revenue.
In November 2005, the Audit Commission accused Leung of not conferring with other government departments before exercising his discretionary power, thus handing the developer an additional HK$3.2 billion. Leung tabled a judicial review. The two sides reached a deal in May 2006 when the Commissioner dropped legal proceedings, and Leung abandoned his judicial review.
39 Conduit Road
39 Conduit Road39 Conduit Road
39 Conduit Road is a residential property situated in Conduit Road in western mid-Levels of Hong Kong. It is a prestige development by Henderson Land Development....
is a residential development by the company situated in the mid-levels in Hong Kong
Mid-levels
Mid-levels is an expensive residential area on Hong Kong Island in Hong Kong. It is located halfway up Victoria Peak, directly above Central...
. Soon after the development was launched in October 2009, the developer claimed to have sold a five bedroom duplex flat, on the "68th floor" of the 46-storey the building for HK$
Hong Kong dollar
The Hong Kong dollar is the currency of the jurisdiction. It is the eighth most traded currency in the world. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies...
439 million (US$57m). The price, equating to US$9,200 per square foot, set the new world record for the most expensive apartment.
Due to selective numbering, a total of 42 intermediate floor numbers are missing from 39 Conduit Road: these include 14, 24, 34, 64, all floors between 40 and 59. The floor above the 68th is the 88th. The Democratic Party accused the developer of misleading; the Consumer Council recognised the accepted common practice of skipping the 13th and 14th floors, but suggested that developers "imaginary heights brought back to earth." Lee Shau Kee argued that buyers liked the numbering scheme.