Hong Kong tycoon Li Ka-shing has just bought the United Kingdom's Eversholt Rail for an estimated $3.8 billion. The move has further expanded the 86-year-old billionaire's UK assets.
Cheung Kong Infrastructure Holdings Ltd., which is owned by Li, bought the company's entire holdings from its investors, 3i Infrastructure, Morgan Stanley and STAR Capital Partners.
Eversholt is one of the country's three top railway companies. It currently operates 19 fleets, which make about 28 percent of the UK's passenger trains.
According to Li's company, the decision to buy Eversholt was based on the company's record of a stable income and long-term leases. The number of passengers taking the railway in recent years was also a factor considered by the Hong Kong-based firm.
Meanwhile, majority holder 3i clarified their company's decision to sell. According to the chairman named Peter Sedgwick, "while 3i Infrastructure generally aims to hold its core investments over the long term, it will sell investments from time to time where this generates significant additional value for shareholders."
The company stands to earn £358 million from the acquisition. This does not include the earlier amount £15.5 million paid to the firm in Dec. 2014.
On the other hand, STAR is reportedly set to make 3.4 times the amount it originally invested in the rail company.
Li's CKI Holdings was also reported to have initially wanted Porterbrook. But when the deal did not materialize last year, the billion-dollar firm turned its sights to Eversholt.
The Hong Kong-based company also considered Dublin-based Awas, an aircraft lessor. However, no further details on the acquisition talks have been made public by both sides.
Eversholt will join Northumbrian Water and mobile network company Three in the list of investments and properties of Li's holding firm. The company is said to have shelled $50 billion to the United Kingdom alone, which makes it the largest foreign investor in the country.