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Wanda boss seeks buying back shares
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CHINA’S richest man Wang Jianlin is considering buying back the Hong Kong-listed shares of a subsidiary of his Dalian Wanda empire, having seen its value plunge a little more than a year after listing.
Shares in Wanda Commercial, one of the world’s largest developers of shopping malls with dozens across China, soared 20 percent after news late on Wednesday that Wang was looking at a privatization.
The firm listed in December 2014 after a US$3.7 billion initial public offering — the biggest in Hong Kong for a real estate firm — but its share price tumbled as the mainland property market slowed sharply.
Shares in the company were initially priced at HK$48 (US$6.19) and peaked at HK$77 in June last year, but fell nearly 60 percent to HK$32 in February. Wang is looking at paying HK$48 a share, a 24 percent premium to its Wednesday closing price.
In a sign of the possible problems ahead, Wanda cut its IPO fundraising target by about a third from the original goal before listing, possibly to attract investors concerned by the slowing real estate market.
The volatility matched those of the wider Hang Seng Index, which soared to multi-year highs in April last year, when Chinese authorities relaxed rules on trading, before slumping in line with global markets during the summer.
“The company’s controlling shareholder has informed the company that it is in the preliminary phase of considering a voluntary general offer ... which, if proceeded with, could result in the privatization and delisting of the company from the stock exchange,” the company said in a statement to the Hong Kong stock exchange.
However, it added that there was “no certainty” the privatization would proceed.
Analyst Jackson Wong said yesterday that the “lackluster performance on the stock price might be the main reason” for Wang’s latest consideration.
“The whole sector has been going down along with the Hang Seng Index,” Wong, associate director of Simsen Financial Group, said in describing the Chinese property market.
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