China Vanke Co (萬科) chairman Wang Shi’s (王石) bid to fend off a takeover has been thrown into doubt after the property developer’s second-largest shareholder, China Resources (Holdings) Co (華潤集團), said the proposal failed to get enough votes from the board.
Vanke’s 45.6 billion yuan (US$6.9 billion) plan to buy assets from Shenzhen Metro Group (深圳地鐵集團) by issuing new shares did not pass the board, because it needs approval from two-thirds, or eight, of the 11 members, China Resources said on Saturday in a statement.
Shenzhen-based Vanke on Friday said its board voted seven-to-three in favor of the plan after one director chose to abstain, citing a conflict of interest.
The opposition from a long-term major shareholder adds uncertainty to Wang’s effort to counter little-known Baoneng Group (寶能集團), which overtook China Resources as the company’s largest shareholder last year in what Vanke management labeled a “hostile takeover.”
If the proposal goes ahead, Baoneng’s shareholding in China’s largest listed property developer would be diluted to 19.27 percent, while Shenzhen Metro would own 20.65 percent, according to Friday’s exchange filing.
“If Vanke doesn’t reconsider the problems in the restructuring proposal and submits the same plan for a vote at board or shareholder meetings in future, China Resources would continue to vote against it to protect the interests of all shareholders,” the state-owned conglomerate said in the statement.
Vanke has a low debt burden and can use either cash or debt to finance the deal and does not need to sell new shares, said China Resources, which owns 15.24 percent of Vanke.
The proposed price of 15.88 yuan per A-share implies a discount of 24 percent to Vanke’s net assets and the land being bought, which would not contribute profit for the next two to three years, would dilute earnings, it said.
China Resources said the proposal does not give Vanke ownership in Shenzhen Metro itself and would not secure cooperation opportunities in other projects with the subway builder.
The land price also does not include taxes, which would significantly push up eventual costs for Vanke, it said.
Vanke defended the proposal in a separate statement, saying it expected the deal to bring “continuous quality project resources” in key Chinese cities at “reasonable” prices and that becoming a major Vanke shareholder, was the only consideration Shenzhen Metro would accept.
The two projects being acquired were the “best two land sites in Shenzhen [China]” — a city where developers are finding it increasingly difficult to obtain land — and would become an important source of profit for Vanke, board secretary Zhu Xu (朱旭) said in the statement.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by