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January 14, 2017

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Shares of Vanke jump after stake sale

SHARES of China Vanke Co surged the most in months yesterday after its second-largest shareholder agreed to sell its entire stake to Shenzhen Metro Group in a deal that may terminate a high-profile tussle over corporate control that Vanke has been embroiled in for over a year.

Vanke shares jumped 6.9 percent to 21.81 yuan (US$3.16) yesterday on the Shenzhen Stock Exchange, the largest gain since November 9. Its Hong Kong-listed shares closed 5.7 percent higher at HK$19.66 (US$2.54), the biggest rise since July 28.

China Resources Group said in a statement released late on Thursday that it has agreed to sell its entire 15.31 percent stake in Vanke to Shenzhen’s state-owned subway operator for 37.17 billion yuan, or 22 yuan per share on average.

Fearing a hostile takeover by Baoneng Group, which became its largest shareholder after building a 25.4 percent stake since mid-2015, Vanke’s management unveiled in June 2016 a key acquisition plan with white knight Shenzhen Metro. The proposal, under which Vanke would buy Qianhai International Development Co, a unit of Shenzhen Metro, for 45.6 billion yuan via a share sale and thus would have made the latter its biggest shareholder, was halted later as Vanke failed to get approval from its major shareholders including Baoneng and China Resources.

China Evergrande Group, Vanke’s third-largest shareholder with 14.07 percent, said in a filing to the Hong Kong stock exchange yesterday that it doesn’t intend to buy more Vanke shares.


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