Vivian D. Labbe
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Vivian D. Labbe in Mergers & Acquisitions,

Short positions in CKI spike

Looks like the see deal undervaluing Power Assets by 25%

Short positions in CKI spike after the deal announcement

Hedge funds are betting Asia's richest man Li Ka-shing will sweeten his proposed $11.6 billion buyout of Hong Kong's Power Assets Holdings, but their hopes may be dashed by top independent shareholder Capital Group whose stance on the matter is a mystery.

Li's Cheung Kong Infrastructure Holdings (CKI) offered this month to buy the 61 percent it does not already own of Power Assets in an all-stock transaction that set a nearly equal value on the two firms. CKI also proposed a $2.5 billion special dividend if the deal goes through.

So hedge funds find CKI interesting for short positions. Meanwhile analysts recommend BUY.


Cheung Kong Infrastructure Holdings Ltd (CKISF.PK)

What would you do?