New World clarifies that investors have no intention to make a full takeover bid, refuting rumors of selling controlling stakes; Morgan Stanley believes Blackstone's motivation to take over is low

New World (017) confirmed on Thursday (29th) that its parent company Chow Tai Fook Enterprises has received inquiries from potential investors regarding investment in New World. The group further clarified today (30th) that the concerned investors have no intention of making a full offer to New World. Following the rumors of a change in ownership, New World's stock price surged by 11.9%, ultimately closing at HKD 11.38, up 2.2%, with a market capitalization of nearly HKD 28.64 billion. Related Articles: New World rumored to change ownership, confirms contact with investors; Zheng Jiachun family reportedly plans to sell controlling stake to American firm Blackstone. No Guarantee of Agreement New World stated that after further inquiries with Chow Tai Fook Enterprises, it is continuing discussions with potential investors, but no agreements have been reached, including any regarding the amount, nature, or form of the investment. New World reiterated that there is no guarantee that the potential investment will proceed. Recently, Bloomberg reported that Chow Tai Fook Enterprises is in deep discussions with the American asset management company Blackstone regarding the possible sale of New World’s controlling stake, but the number of shares involved and the pricing are still unknown. Currently, Chow Tai Fook holds a 45.33% stake in New World. Acquiring 30% Stake Will Trigger Mandatory Offer According to Article 26 of the Takeovers Code, when an investor acquires 30% or more of the voting rights, it is deemed to have gained control of the company, which will trigger a mandatory full offer. JPMorgan Believes Blackstone's Investment in Projects is More Reasonable Regarding the rumors of Blackstone taking control, JPMorgan believes that Blackstone has little motivation to acquire the controlling stake in New World, and it would be more reasonable for them to invest in projects or assets. The bank indicated that if Blackstone were to propose acquiring a 30% stake, the amount involved would be HKD 10 billion, while a full acquisition could reach HKD 34 billion, and they would have to bear HKD 146 billion in net debt. New World’s price-to-book ratio (PB) is 0.17 times, with its enterprise value multiple higher than the industry average. Related Articles: Blackstone's potential takeover of New World shocks the market; adept at buying undervalued assets and reselling for profit; previously helped a well-known hotel revive. Bank of America: Introducing Blackstone Could Drive Dividends Bank of America Securities believes that the mid-term stock price trend of New World still carries a high degree of uncertainty, with the key being how to resolve the debt issue. If Blackstone is introduced, it is expected that its asset management experience could create more value and enhance the company's likelihood of resuming dividend payments. Citigroup's research report pointed out that rights issues, placements, or direct share sales could bring about the risk of equity dilution for New World, but would be beneficial for its credit situation