HONG KONG • Power Assets shareholders yesterday rejected a US$12.4 billion (S$17.5 billion) buyout offer from billionaire Li Ka Shing, dealing a rare setback for Hong Kong's richest man as he seeks to consolidate his utilities and infrastructure businesses before handing over control of his empire to his elder son Victor.

Mr Li, 87, making his offer through Cheung Kong Infrastructure (CKI), failed to get enough Power Assets minority shareholders voting at a meeting to approve the deal, according to a statement to the Hong Kong bourse.

The proposal needed at least 75 per cent of votes cast by minority shareholders to be passed. Only 50.8 per cent did.

Earlier this month, influential proxy advisers Institutional Shareholder Services and Glass Lewis recommended that investors vote against Mr Li's offer, defying a man who is so revered in Hong Kong for his business acumen that he is known as "Superman".

CKI had offered 1.066 of its shares for every one of affiliate Power Assets, a deal valued at US$12.4 billion based on their latest stock prices. It also proposed a special dividend of HK$7.50 per share payable to the combined company's shareholders after the deal.

Besides not getting enough votes, about 26 per cent of Power Asset's minority holders rejected the deal. In order to go through, no more than 10 per cent of those shareholders could turn down the proposal.

CKI will not be able to make another attempt to buy Power Assets for another year.

BLOOMBERG