Swire Properties sell-down

Swire raises $645 million from sale of Swire Properties stake

John Swire & Sons offloads roughly half of its stake in the company, after the stock gains more than 30% since its trading debut in January.
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The East: a recent addition to Swire's hotel interests
<div style="text-align: left;"> The East: a recent addition to Swire's hotel interests </div>

The Swire group has reduced its shareholding in Swire Properties, raising HK$5 billion ($645 million) by selling roughly half the stake it held in the company through John Swire & Sons (HK).

The deal was launched at around 8pm on Monday in Hong Kong and priced just before the market opened yesterday. It attracted strong demand from long-only investors, as well as property specialists, a source said. There were more than 90 accounts in the book, with demand coming from all around the world — 50% from Asia, 35% from the US and 15% from Europe, another source said.

Swire sold 234 million shares, or 4% of the existing share capital of Swire Properties, for HK$21.46 each, the bottom of an indicative range, sources said. The deal was marketed between HK$21.46 and HK$21.94, which represented a discount of 8% to 10% over Monday’s close of HK$23.85.

Following the transaction, Swire Properties’ stock slid 4.2% to HK$22.85 yesterday. However, the stock has gained more than 30% since its listing by introduction in Hong Kong in January, while the Hang Seng Index has added about 3% during the same period.

With such strong returns, the Swire family clearly saw an opportunity to take some money off the table, one of the sources said.

Through the sale, the Swire group has cut its direct shareholding in Swire Properties to about 3.7% from about 7.7%, although it will continue to have an indirect interest in the property company through its shareholding in Swire Pacific, which holds about 82% of Swire Properties.

Swire Pacific is one of Hong Kong’s leading publicly quoted companies, with a history in the city that dates back more than a century. Its interests are grouped under five divisions: property, aviation, beverages, marine services and trading and industrial, according to its website. Swire Properties is Hong Kong’s second-biggest landlord and a large operator of retail space, it says.

As the deal comprises existing shares, it will not affect the total number of issued shares in Swire Properties, but will result in the public float of Swire Properties increasing to about 14.3% from about 10.3%, according to the statement.

Bank of China International (BOCI), HSBC and Morgan Stanley were the joint bookrunners for the deal.

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