Chinese billionaire Wang Jianlin’s (王健林) Dalian Wanda Group Co (萬達集團) is offering HK$34.5 billion (US$4.4 billion) to buy out its Hong Kong-listed property unit as it seeks a higher valuation for the business on Chinese stock exchanges.
Wanda Group is to pay HK$52.80 for each Hong Kong-traded share of Dalian Wanda Commercial Properties Co (大連萬達商業地產), the company said yesterday in a statement, 10 percent higher than an earlier offer of at least HK$48 and 3 percent higher than its last trading price of HK$51.25 before trading was halted on April 22.
The shares, which have traded in Hong Kong for less than two years, fell to HK$49.60 at 1:09pm after resuming trading yesterday.
Photo: AP
Wang, who controls Wanda Commercial’s Beijing-based parent, told China Central Television on Sunday last week that the unit is “substantially undervalued” and must proceed with the privatization.
The billionaire has been seeking investors to help purchase as much as 14.41 percent of the shopping-mall operator and relist it in China, according to a document sent to prospective backers.
Going-private deals that aim to relocate overseas share listings to Shanghai or Shenzhen have been under the spotlight after China’s stock regulator voiced concerns such transactions could flood its market. Wanda’s transaction is pending shareholder and regulatory approvals, the statement said.
In its pitch to investors, Wanda Group cited an average valuation of 29 times estimated full-year earnings for mainland listings, based on four companies engaged in managing free-trade zones and industrial parks. Wanda Commercial was trading at about 6.4 times earnings before trading was halted last month, data compiled by Bloomberg showed.
Wanda Group is to proceed with plans to buy out the property unit after considering whether to scrap the deal in the wake of regulatory concerns, people familiar with the matter said.
Wang joins a growing number of Chinese tycoons seeking loftier valuations for their companies by moving their listings from Hong Kong and New York.
Evergrande Real Estate Group Ltd (恆大地產集團) might consider going private or listing in China given its chairman’s view that the developer’s valuation in Hong Kong is distorted, Citigroup Inc said in an April 18 report.
US-listed SouFun Holdings Ltd (搜房網), China’s biggest real-estate Web portal, is seeking to move its shares to Shanghai via a backdoor listing.
Such deals have drawn regulator scrutiny, with the China Securities Regulator Commission saying earlier this month that it is conducting research on their possible impact.
Regulatory concerns have recently roiled shares of US-traded Chinese companies such as Qihoo 360 Technology Co (奇虎360), which have announced privatization plans.
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