HONG KONG -- Shares of Power Assets Holdings, a Hong Kong-based investor in electric utilities, on Friday surged to their highest level in three and a half months in intraday trading on the Hong Kong bourse, following an announcement that the company will pay a special dividend of 5 Hong Kong dollars per share.
Power Assets temporarily rose 3.4%, or $HK2.5, from Thursday's close to $HK75.00, a level the shares have not seen since Oct. 6.
Investors flocked to the dividend, which is to be paid on Feb. 28.
According to the announcement, which came late Thursday afternoon, Power Assets will pay the dividend to shareholders of record on Feb. 15.
CK Hutchison Holdings, led by Li Ka-shing, a Hong Kong-based billionaire, holds a major equity stake in Power Assets. Market participants say the dividend is meant to transfer funds to another CK Hutchison group company.
The Hong Kong Economic Journal said Cheung Kong Infrastructure Holdings, an infrastructure company in Hong Kong, will receive $HK4.15 billion from the special dividend payment as it owns 830 million Power Assets shares. Cheung Kong stock temporarily rose 2% during Friday's trading in Hong Kong.
In 2015, CK Hutchison sought to merge Cheung Kong and Power Assets; the plan was stymied by opposition from some of the utility investor's shareholders. CK Hutchison allegedly tried to funnel some of Power Assets' ample cash into Cheung Kong in a bid to accelerate the acquisition of overseas infrastructure businesses.