(Bloomberg) — Supply Lines is a daily newsletter that tracks global trade. Sign up here.
Most Read from Bloomberg
CK Hutchison Holdings Ltd. shares plunged Friday after China’s top office on Hong Kong affairs reposted a sharp attack on the conglomerate’s decision to appease President Donald Trump by selling its stake in Panama ports.
The commentary that the Hong Kong and Macau Affairs Office posted on its website originally appeared in the Ta Kung Pao newspaper and warned companies to be very careful about which “side they should stand on.”
It said that social media users have accused the conglomerate founded by billionaire Li Ka-shing of “spineless groveling,” ignoring China’s interests and “selling out all Chinese people” in the quick deal announced last week.
CK Hutchison’s shares fell as much as 6.7% Friday morning, the most since September 2022, highlighting investor concerns that Beijing might try to intervene in the deal. Li’s company stands receive cash proceeds of more than $19 billion if the transaction goes through, roughly equivalent to the company’s market value before the deal was announced.
“Faced with such a major event and a matter of great justice, the relevant companies should think twice, think carefully about the nature and crux of the issue, and think carefully about what position and side they should stand on,” the commentary said.
CK Hutchison didn’t immediately respond to a request for comment Friday.
While the deal, which involves only overseas assets, is unlikely to need Beijing’s sign-off, the apparent expression of disapproval by Chinese authorities underscores the balancing act facing executives whose companies get caught up in the widening China-US rivalry. CK Hutchison and sister company CK Asset Holdings Ltd. are registered in the Cayman Islands — a move carried out in 2015 as part of a group-wide restructuring. CK Hutchison accrues almost 90% of its revenue from outside of mainland China and Hong Kong.
Last week, CK Hutchison agreed to sell a controlling stake in Panama ports that had become a political lightning rod. The potential purchase by BlackRock Inc. would be one of the biggest acquisitions of the year, and marked a win for Trump, who had raised concerns over control of key ports near the Panama Canal.
“It’s a massive complex deal, one that may take the better part of 2025 to complete; therefore gyrations in the share price will occur as deal specifics and various regulatory approvals are addressed,” said David Blennerhassett, an analyst at Quiddity Advisors who publishes on Smartkarma.
The Ta Kung Pao commentary was “face-saving bluster” and “to be expected,” he added.
Trump argued that China had taken over the critical waterway, without providing evidence, and that the US was paying too much for the passage of ships. He previously demanded the fees charged on US naval and merchant ships be lowered, or else Panama should return the canal to the US.
Ta Kung Pao, a newspaper that tends to support Beijing’s policies, said in the piece the US would use the ports deal “for political purposes and promote its own political agenda.”
“China’s shipping and trade here will inevitably be subject to the US,” it added.
It also said the US was “doing its utmost to contain and suppress China’s development,” repeating a line often used by the Asian nation’s diplomats when they criticize Washington.
“The deal is widely perceived as commercially favorable for the company, valuing the port assets at the higher end of industry range,” said Denise Wong, a Bloomberg Intelligence infrastructure analyst.
But there could be heightened concern over whether the company can realize the value of its assets if the sale falls through, she added, pointing out that CK Hutchison’s market capitalization increased by about $5 billion following the announcement of the deal, just a fraction of the $19 billion the firm is expected to receive, which may partially reflect execution risks.
It isn’t the first time Li has faced criticism in Chinese state media, which reported that his companies were offloading their properties in the mainland and questioned his loyalty to China — an accusation that Li’s office vigorously denied.
During months of political unrest in Hong Kong in 2019, Li again drew Beijing’s ire by publishing a vague message in local newspapers with lines from a Chinese poem that were widely interpreted as a call for not only halting the violence in Hong Kong’s streets, but also stressing freedom, tolerance and the rule of law. He also urged the government to show leniency toward young people when dealing with the protests, while calling on the youth to consider the big picture.
–With assistance from Sangmi Cha.
(Adds analyst commentary in ninth, 10th, 15th and 16th paragraphs.)
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
