Shares of Vanke Co (萬科) yesterday surged after China’s biggest property firm announced a stock-holding shift that could end a bid by private conglomerate Baoneng Group (寶能集團) to pull off the nation’s first hostile blue-chip takeover.
Vanke’s leadership has for more than a year sought to fend off Baoneng’s advances, which have also prompted an official government denunciation of “barbarian” takeover attempts.
Baoneng had since 2015 built up a 25 percent stake to become Vanke’s biggest shareholder in what has emerged as a test of how much progress China’s often dysfunctional stock market and corporate world were making in opening up to free-market practices such as blue-chip takeovers.
However, Vanke said in a statement to the Hong Kong Stock Exchange late on Thursday that Chinese state-owned subway operator Shenzhen Metro Group (深圳地鐵集團), which is believed to be sympathetic to Vanke’s top bosses, would purchase a 15.31 percent stake in the firm.
Business journal Caixin yesterday reported that Shenzhen Metro Group might buy the 14.07 percent Vanke stake held by Guangzhou Evergrande (廣州恆大), another major property firm, which would give it a bigger stake outright than Baoneng.
‘SYNERGY’
The state-run Shanghai Securities News said that Shenzhen Metro’s involvement “means Vanke’s share-control battle took a significant step in the direction of a solution” in Vanke’s favor.
Vanke shares have see-sawed amid the takeover battle and analysts said that the latest wrinkle helps lay the turmoil to rest and that Vanke’s land business could find a symbiotic partner in the subway operator.
“The synergy effect between Shenzhen Metro and Vanke would be great,” said Dickie Wong (黃德几), Hong Kong-based research director for Kingston Securities Ltd (金利豐證券), calling the plans “the best outcome” for Vanke.
Vanke shares rose 5.7 percent to HK$19.66 in Hong Kong trading yesterday.
‘BANDIT’
Baoneng’s bid may have already been doomed after China Securities Regulatory Commission Chairman Liu Shiyu (劉士餘) last month railed last month against blue-chip takeovers by suitors who become “a barbarian, and then eventually a bandit,” comments widely seen as prompted by the Vanke battle.
Vanke chairman Wang Shi (王石) and his executives own only about 0.2 percent of the company, but retain a tight grip by virtue of their positions and their reputations as among China’s best management teams.
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