Shares of CKH HOLDINGS up 11% following 22% increase in prior session.

U.S. President Donald Trump has hailed a deal led by U.S. firm BlackRock to buy most of the $22.8 billion ports business of Hong Kong conglomerate CK Hutchison, including assets it holds along the Panama Canal.

The deal with the BlackRock-led consortium includes 90% of Panama Ports Company, which has operated the Balboa and Cristobal ports at each end of the canal for over two decades, said CK Hutchison.

"We are glad to see U.S. investors acquire a controlling stake in Panama Ports Company, which owns and operates the ports of Balboa and Cristobal at either end of the Panama Canal," a U.S. State Department official said in a statement to Reuters.

CK Hutchison is a publicly listed Hong Kong company not financially tied to the Chinese government and other ports in Panama are operated by companies from the U.S., Taiwan and Singapore.

Trump has previously complained about the presence of Chinese and Hong Kong-based companies in Panama, and American officials and politicians have said CK Hutchison's control of the ports represents a security risk for the operation.

In total, the consortium, which includes Terminal Investment and Global Infrastructure Partners, will control 43 ports comprising 199 berths in 23 countries, the conglomerate said.

The high purchase price sent CK Hutchison's stock up more than 20% on Wednesday, outpacing a 2.8% rise in Hong Kong's broader Hang Seng Index. Its price is now the highest since August 1, 2023.

The sale involves CK Hutchison's 80% stake in Hutchison Ports with an equity value of $14.21 billion. However, the conglomerate will receive more than $19 billion following repayment of some shareholder loans.

Goldman Sachs is advising CK Hutchison on the deal, two sources with knowledge of the deal said. Goldman Sachs declined to comment.

John Waldron, the president of Goldman Sachs, was among the senior bankers involved in the talks due to the high-profile nature of the transaction, a third person familiar with talks told Reuters. Bankers at Goldman in Hong Kong were also involved, the source said.

The size of the proceeds would be similar to CK Hutchison's entire Hong Kong market value prior to Wednesday's share rally.

The remainder of Hutchison Ports is owned by Singapore's PSA International.

About 12,000 ships used the Panama Canal last year that connects 1,920 ports across 170 countries. Its position is strategic for the U.S. as more than three-quarters of vessels passing through originate in or are bound for the United States.

"I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports," CK Hutchison co-managing director Frank Sixt said in a statement.

Hong Kong returned from British to Chinese rule in 1997 with the guarantee its freedoms, including freedom of speech, would be protected under a "one country, two systems" formula.

Mulino on Thursday said that Trump's so-called "reclaiming" of the Canal had not been part of discussions with U.S. Secretary of State Marco Rubio in a recent visit or with any other U.S. official.

The U.S. controlled the Canal and the area around it until it signed treaties in 1977 granting Panama control and sovereignty over the canal zone and guaranteeing its permanent neutrality. The treaties took effect in 1999.

The U.S.' involvement in the canal is widely considered a pain point for many Panamanians, with around two dozen protesters killed in a 1964 confrontation with Canal authorities.

RAPID, COMPETITIVE PROCESS

CK Hutchison had been waiting for Panama Supreme Court to make a final ruling about the legal status of its government contract to operate the ports after the local attorney general determined the contract "unconstitutional".

The conglomerate, controlled by billionaire tycoon Li Ka-shing, has interests ranging from infrastructure and retail to telecoms, aside from being the world's largest privately owned port operator.

Li has been diversifying his business outside of Hong Kong and mainland China since the 1980s and now only about 12% of CK Hutchison's revenue is from Hong Kong and China, with the remainder from Europe, the rest of Asia Pacific and Canada.

Sixt said the ports deal was the result of "a rapid, discrete but competitive process" during which CK Hutchison received numerous bids and expressions of interest.

JPMorgan said in a report that while selling the Panama business is "understandable", the deal is nevertheless a "surprise" given most of CK Hutchison's other ports are not in regions directly exposed to Sino-U.S. geopolitical tension.

It could be "an opportunistic deal", JPMorgan said. "Based on our understanding of the management philosophy of CKH, any deal is possible as long as 'the price is right'."

The brokerage said the deal would represent a significant strategy shift because it would leave ports contributing about 1% of the conglomerate's earnings before interest, tax, depreciation and amortisation, down from 15%.

The contribution of infrastructure, currently the largest segment, will rise to 33% from 28%.

The $19 billion that CK Hutchison is set to receive from the sale is well above a $13 billion valuation on the ports assets estimated by analysts.

"The disposal would be significantly value enhancing," Citigroup analysts said.

CK Hutchison's net debt level was HK$138 billion ($17.76 billion) in June and the sales proceeds could put the conglomerate into a net cash position, UBS analysts said.