Li Ka-shing agreed invest $60 million to help Facebook expand its social networking site, but a media firm controlled by the Hong Kong billionaire denies this, writes Samantha Chang of TheImproper.com.
Li Ka-shing may have agreed to write a $60 million check to help Facebook founder and chief executive Mark Zuckerberg build out his fast-growing social networking site, but a media company controlled by the Hong Kong billionaire denies that the money went through them.
“The company advised that it has not made any investment in Facebook,” Tom Group, which Mr. Li controls, said in a statement to the Hong Kong stock exchange.
The denial followed a report in Dow Jones’ All Things Digital blog that the 79-year-old chairman of Cheung Kong and Hutchison Whampoa, which owns the Tom Group, had invested $60 million in Facebook, with the right to invest an additional $60 million, according to NYTimes.com.
But the report added that Mr. Li was not making the investment through the companies he controls, but through another investment entity.
However, there were rumors of a partnership between the Tom Group and Facebook, which sent Tom’s shares up 48 percent. Facebook and Hutchison Whampoa have remained mum on the subject.
The investment would be pocket change for Mr. Li, whose Hutchison Whampoa empire includes a diverse array of holdings from some of the world’s biggest port operators and retailers, property developers and telecommunications operators. Forbes reported his worth at $23 billion earlier this year, making him the world’s ninth-richest man.
News of the investment, which would represent about 0.4 percent of the company, comes on the heels of a $240 million investment in Facebook by Microsoft last month. That deal was equivalent to a 1.5 percent stake, valuing the privately-held social-networking company at $15 billion.
And, according to Kara Swisher of All Things Digital, while Facebook is still planning on raising more cash from outside sources, buyout shop Providence Equity Partners has decided not to invest due to the “onerous terms” — those were Ms. Swisher’s words — that Facebook has demanded from investors.
Providence, the blog said, was put off by the lack of downside protection and also the fact that a major investment in Facebook would not get them a seat on the board of the start-up.
--Samantha Chang is the executive editor of TheImproper.com
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