CK Hutchison Holdings Ltd. said it may invite a “major strategic investor” from China to join a group seeking to buy its global ports, as the Hong Kong-based company works toward a solution that pleases all in the geopolitically-sensitive deal.

The unnamed investor would join as a significant member of the consortium, the company said in a stock exchange filing July 28, hours after the expiry of a 145-day exclusive talks window with the group backed by American asset manager BlackRock Inc.

“Changes to the membership of the consortium and the structure of the transaction will be needed for the transaction to be capable of being approved by all relevant authorities,” CK Hutchison said, adding that it “intends to allow such time as is required for such discussions.”

State-owned China Cosco Shipping Corp. was negotiating a powerful role for itself as a condition to join the consortium, Bloomberg News reported last week.

Shares of Hong Kong billionaire Li Ka-shing’s firm oscillated between gains and losses after the announcement. The stock closed 0.84% lower in Hong Kong on July 28. Cosco Shipping Holdings Co., the listed unit of China Cosco, was down 2.9%.

The confirmation of a Chinese investor will likely help remove the obstacles that have been holding back the deal. Beijing has so far viewed the sale of CK Hutchison’s 43 ports as a threat to its interests because it includes transfer of two ports along the strategically important Panama Canal to the group backed by BlackRock — which China considers a proxy for American influence.

Chinese authorities separately warned the parties involved not to bypass antitrust reviews, so as to prevent them from rushing into a deal. 

CK Hutchison reiterated its position July 28 that it “will not proceed with any transaction that does not have the approval of all relevant authorities.”

CK Hutchison’s shares, which shot up 37% in the days following the sale announcement on March 4, saw political pressure wipe out all the gains in the space of a month. The stock started rallying again in June, as investors flocked back after China Cosco came into play.

While it may initially sound like positive news, restricting the group to a few potentially strategic buyers means limited competition in the price discovery process for the asset, according to Ke Yan, head of research at DZT Research in Singapore. 

“Hence, the deal may not fetch the best price that the company hopes for,” he said.

‘Eased Concerns’

Investors have in recent weeks flocked back to CK Hutchison amid optimism that the 96-year-old Li will seal the deal of his lifetime. If it goes through, the sale will net the group more than $19 billion in cash. The renewed optimism is largely due to China Cosco’s interest in playing a role in the buying consortium, alongside BlackRock and Italian billionaire Gianluigi Aponte’s Terminal Investment Ltd.

“Ongoing negotiations and the reported inclusion of Cosco Shipping in the consortium have likely eased concerns over Chinese regulatory hurdles, strengthening investor confidence in the deal’s viability,” according to Bloomberg Intelligence analyst Denise Wong.

Initially hailed as a smart move by Li to exit a business caught up in global trade tensions, the deal quickly drew the ire of Beijing. It didn’t help that President Donald Trump billed the transaction as the return of Panama Canal back to American influence.

Challenges remain even as Cosco enters the discussions, David Blennerhassett, an analyst at Quiddity Advisors, wrote on financial analysis platform SmartKarma. That could reverse the current rhetoric and upset Trump, who has a handful of issues already on his plate, he said. CK Hutchison’s share price could also be under pressure should talks on the sale drag on, he added.

Even with an extended timeline, revised terms or a partial agreement, uncertainty around the deal’s value and timing would increase, said Bloomberg Intelligence’s Wong. The delay may also fuel concerns about regulatory and policy challenges, she said.

Investors will be watching out for more answers to questions surrounding the deal, including what role the Chinese side will play in the consortium, said Gary Ng, a senior economist at Natixis.

The controversial deal has also weighed on Li and his family’s other businesses. Younger son Richard’s talks to expand his insurance business into mainland China have stalled after the ports deal upset Beijing, Bloomberg reported earlier this month. That followed another Bloomberg report in March that China told its state-owned firms to hold off on any new collaboration with businesses linked to the Li family.

The original structure of the buyer consortium was designed to give the Aponte family-controlled Terminal Investment ownership of all the ports except the two in Panama, whose control will go to BlackRock’s Global Infrastructure Partners unit.