Magic Circle Firms on $5.7 Billion Li Ka-shing Deal

Clifford Chance and Freshfields Bruckhaus Deringer have the lead roles on Singaporean sovereign wealth fund Temasek Holdings Pte. Ltd.’s proposed $5.7 billion stake purchase in A.S. Watson & Co., the retail unit of Hong Kong conglomerate Hutchison Whampoa Ltd.

In a statement, Hutchison Whampoa, which is controlled by Hong Kong tycoon Li Ka-shing, said that Temasek plans to buy a 24.95 percent share of A.S. Watson. The deal is expected to close in April.

A.S. Watson operates, among others, ParknShop, one of the territory’s two dominant supermarket chains, Watsons, a major health and beauty chain in Hong Kong and mainland China, and Fortress, a home appliance retail chain.

Li is reportedly planning an initial public offering for A.S. Watson later this year that could fetch as much as $6 billion. Temasek’s investment will value A.S. Watson at around $22.8 billion. In a filing with the Hong Kong Stock Exchange, Hutchison Whampoa, which will retain 75.05 percent ownership of A.S. Watson, said it would work with Temasek to continue pursuing a listing. However, South China Morning Post reported that at a press conference on Friday, Li said the IPO could be delayed for two to three years.

Clifford Chance is advising Temasek. Freshfields Hong Kong partners Robert Ashworth and Simon Weller are leading a team advising Hutchison Whampoa.