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An Asian saying has it that the first generation creates wealth, the second conserves it and the third loses it. There’s no maxim for a seventh cohort such as that running conglomerate Jardine Matheson, which is struggling to fully shrug off its fusty reputation.
The famed Hong Kong-based empire has gained about 50 per cent since January — its best performance in 15 years — as executive chair Ben Keswick, a member of the seventh generation of the 193-year-old group’s controlling families, has continued efforts to pivot from actively operating its companies to something more like private equity.
Keswick’s latest move is to buy the 12 per cent Jardines doesn’t already own in the Mandarin Oriental hotel chain, valuing the business at $4.2bn. Jardines gets to tidy its corporate tangle and, even more neatly, pocket cash in the process by selling part of Mandarin’s glitzy new harbour front office building. That implies a special dividend of $667mn for Jardines, more than covering the $415mn to buy the outstanding hotel chain stake.
The fall in Jardines’ stock in response to this tinkering suggests the group’s family-first reputation is proving hard to discard entirely. In fairness that’s not undeserved. The group’s structure, where companies are domiciled in Bermuda, listed in London, mostly traded in Singapore yet operated from Hong Kong, has been frustrating to follow. A standard, not premium, London listing, also removes some investor protections.
Meanwhile, a famously complex 1980s circular structure had made the family raid-proof but at the expense of its companies’ valuations. That was only dismantled in 2021. Fights with shareholders unhappy about the lowball deal are still rattling around the courts of the Commonwealth.
There is, however, much to encourage. Jardines’ property arm, Hongkong Land, in April sold floors in a prized office skyscraper for the first time in more than 30 years and is promising more. It has owned many sites for more than a century. In March, Keswick publicly spelled out the shift from operator to engaged investor. Next month private equity veteran Lincoln Pan starts as group chief executive.
Perhaps it is the dizzying pace of change — by the standards of Jardines, anyway — that is giving investors pause. The group is storied, in helpful and less helpful ways, being perhaps best known for its appearance, in fictionalised form, in novelist James Clavell’s Noble House book and a 1980s swashbuckling Pierce Brosnan TV mini-series. A change of tack, if it sticks, would mark a genuine new chapter in its business.
jennifer.hughes@ft.com
