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Hutchison sells Vodafone stake
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March 22, 2000: 8:46 a.m. ET
HK conglomerate reduces holding in U.K. mobile phone company
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LONDON (CNNfn) - Hong Kong conglomerate Hutchison Whampoa on Wednesday sold almost a third of its 5.1 percent stake in Vodafone Airtouch the world's largest mobile phone company for about £3.2 billion ($2 billion) to raise funds to invest in other telecommunication ventures.
Hutchison became a shareholder of Vodafone (VOD) when the U.K. cellular giant bought German telecoms company Mannesmann, where Hutchison's holding dated back to its sale of U.K. mobile phone operator Orange to the German company in 1999.
"It has always been Hutchison's strategy to be able to control its investments," said Jo Oliver, an analyst at Lehman Brothers. "Hutchison had no strategic input into Vodafone. It had no directors on the board and it can use its money effectively elsewhere."
Hutchison may use the money raised to invest in China's expanding telecom market. It sold 925 million shares, or 1.5 percent of Vodafone, at 349 pence a share, through investments banks Deutsche Bank and Goldman Sachs.
Vodafone shares slumped 5.9 percent to 355.75 pence midday Wednesday. "The Hutchison disposal should not be viewed as a comment on Vodafone," Lehman's Oliver said. "There is a general shortage of money for investment in the telecoms market." Oliver said he rates Vodafone shares a buy and has a price target of 500 pence by Dec. 2000.
Hutchison has extensive interests in ports, shipping, food processing, distribution, retailing, manufacturing, and real estate. The company, which also has telecommunications, energy and financial-services holdings, is 49.9% owned by Cheung Kong (Holdings), founded by Li Ka-shing, one of the world's wealthiest men.
Vodafone said it wasn't warned about the sale, but declined to comment further. 
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Vodafone
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