HONG KONG—Great Eagle Holdings Ltd. 0041.HK -3.79% is seeking to raise around US$800 million via a listing of its Langham hotel operations in Hong Kong, people with direct knowledge of the deal said, adding to the number of sizable initial public offerings in the city after a tepid performance last year.
The move would provide the Hong Kong-based company with capital for new investments at a time when city's tourist arrivals are hitting new highs. The Langham hotel chain under Great Eagle is a favorite with high-end mainland Chinese travelers, who make up the bulk of tourists in Hong Kong.
In Hong Kong, the chain, which is owned by Hong Kong tycoon Lo Ka Shui and family, has two hotels under the Langham hotels brand, and a third, called Eaton Smart. Great Eagle has four hotels in North America, including Langham hotels in Chicago, Boston and Los Angeles.
Great Eagle is planning to list the Hong Kong hotels in the third quarter, one of the people said Friday, encouraged by gains in the stock market and Chinese insurer People's Insurance Co. (Group) of China Ltd.'s strong performance after its December debut.
PICC, which raised US$3.1 billion in Hong Kong's biggest IPO in 2012, has risen 29% since its Dec. 7 listing. The city's benchmark Hang Seng Index has risen 8% in the past two months due to ample liquidity, and Hong Kong is showing signs of regaining its IPO crown after losing the top spot for the first time in four years in 2012. Chinalco Mining Corp. International raised US$397 million in Hong Kong's first sizable initial public offering in 2013, people familiar with the situation said Thursday.
Sentiment toward the hotels industry is also buoyant, as Hong Kong's tourist arrivals rose to a record 48.6 million last year, driven by an influx of mainland Chinese travelers. Shares in Hong Kong-listed Hong Kong hotel operator Regal Hotels International Holdings Ltd., 0078.HK -0.26% for instance, were up 51% last year, outperforming the benchmark Hang Seng Index's 23% gain.
Great Eagle, whose interests range from hotels to restaurants, said late Thursday it was planning to list its Hong Kong hotels in a stapled units structure, which typically pays dividends from mainly cash flow, and is popular among investors seeking steady and long-term income. The only other listed company in Hong Kong with a stapled structure is HKT Trust & HKT Ltd., 6823.HK +0.14% the telecommunications trust spun off from PCCW Ltd. 0008.HK -0.61%
After the listing, Great Eagle will hold not less than 51% in the stapled units, the company said. However, it didn't provide more details, including the size and the timetable, for the listing.
Mr. Lo, who runs Great Eagle, is ranked No. 37 on the Forbes 2013 Hong Kong Rich List with a worth of US$1.33 billion. He has been investing heavily in expanding Langham's chain of hotels globally, and said in October the company plans to buy a hotel property on New York City's Fifth Avenue for US$229 million.