The Partners Fund’s largest positive contributor, CK Hutchison (HKSE:00001) (formerly Cheung Kong), announced its intention to merge with subsidiary Hutchison Whampoa and spin out the combined property company. This latest savvy move by founder and CEO Li Ka-shing should lessen the holding company discount on the stock as underlying business exposures are clarified and the spin off highlights the value of the combined property business. The stock gained 22% during the quarter. An independent valuer recently appraised CK Hutchison’s property business 48% higher than stated book.(1) The company’s high profile dramatic restructuring of a blue chip Asia conglomerate has the potential to unleash similar restructurings in the region.
From Mason Hawkins (Trades, Portfolio)’ Longleaf Partners Fund Q1 2015 Management Discussion.
