Li Ka-shing, the Hong Kong tycoon nicknamed “superman” in his home town, has had his ups and downs investing in the UK.
The $14.6bn windfall from the sale of Orange to Mannesmann in 1999, and the $9bn profit he logged when Vodafone bought his Indian telecoms investment in 2007, are just a couple of highlights from his celebrated career.
But a blot on his record is an early foray into 3G mobile phone services, which took more than eight years to record its first operational profit.
The question today is whether he is making a costly mistake by paying racy multiples for utility companies in one of western Europe’s most mature markets. “There’s certainly a risk of overpaying,” says Robert Miller-Bakewell, a former equity analyst who covered the sector for two decades.
Less than a year after a consortium led by Cheung Kong Infrastructure, Mr Li’s investment vehicle, snapped up EDF’s UK power grids for £5.8bn, CKI last week made an indicative cash offer to buy Northumbrian Water in a deal that would give the FTSE 250 company an enterprise value of £4.7bn.
It is the latest sign that the supposedly dull UK utilities sector remains a big draw for CKI – despite its base in one of the world’s fastest-growing economies and the demand for funds for large projects across Asia.