‘Art of the deal’: UK telecoms exit fits Li family’s trademark timing for selling at top

Disposal of VodafoneThree adds to Li family’s record of cycle-savvy moves, with investors weighing where war chest will flow next

CK Hutchison Holdings’ shares climbed to their highest level since 2020 after the conglomerate announced plans to exit the UK mobile market, signalling that investors believe the Li family may once again have timed an industry peak before the broader market.

Shares rose about 12 per cent to HK$73.30 on Monday from the May 5 close, after the company said it would sell its 49 per cent stake in VodafoneThree for US$5.8 billion. CK Hutchison said the disposal was expected to generate a gain of about HK$4.7 billion (US$600 million).

Investors appear to be betting the conglomerate is exiting a mature industry at the right time, as concerns grow over the long-term outlook for traditional telecoms businesses.

“The group actively manages its portfolio and strategically seeks value-enhancing opportunities … this will allow for potential capital redeployment towards debt reduction or future investments,” said Aras Poon, associate director at S&P Global Ratings.

For decades, the Li family has built a reputation for exiting businesses near the top of market cycles, a strategy that Steve Chow, an independent equity analyst at Asia Pulse and former ABCI Securities analyst, described as an “art of the deal”.

“When the business cycle matures, they recycle capital and take profit. Every time they do it very well,” Chow added.