Shares of office developer SOHO China tumble after Blackstone scraps deal (updated)

SOHO China

13/09/2021 06:02

(Adds sources comment, other details)
    HONG KONG, Sept 13 (Reuters) - Shares of Chinese office
developer SOHO China  0410.HK  tumbled 40% on Monday in their
biggest daily drop since listing more than 14 years ago after
Blackstone Group Inc  BX.N  scrapped what would have been
China's largest real estate buyout.    
    The stock fell to as low as HK$2.10, the lowest since Nov.
3, 2020, in its worst day since listing in Oct. 2007.
    SOHO China said Blackstone, which had offered HK$5 per share
in June to buy all shares in the company, had abandoned the $3
billion deal on Friday as pre-conditions were unable to be
satisfied.  urn:newsml:reuters.com:*:nL4N2QC2CY urn:newsml:reuters.com:*:nL3N2NY12L
    The company had said in June the deal was subject to Chinese
competition authorities granting clearance.    
    Two sources with knowledge of the deal told Reuters the
State Administration for Market Regulation did not want the
takeover to go through, with one of them adding the regulator
"just went silent."
    The source said they believed President Xi Jinping's common
prosperity campaign https://www.reuters.com/world/china/what-is-chinas-common-prosperity-drive-why-does-it-matter-2021-09-02,
 which seeks to narrow a yawning wealth gap, may have played a
part in the regulator's refusal amid concerns over the SOHO
owners' plans to invest the proceeds overseas.
    Blackstone, SOHO China and China's market regulator did not
immediately respond to requests for comment.
    SOHO China is 64% owned by the husband-and-wife founding
team of Chairman Pan Shiyi and Chief Executive Zhang Xin, who
have been scouting for buyers for its prime commercial property
assets as they looked to shift their focus to overseas markets. 
    In state media CCTV live broadcast on Saturday, one day
after the announcement, Pan and Zhang were shown in the
spectator stand watching the U.S. Open in which Britain's tennis
player Emma Raducanu won over Canada's Leylah Fernandez. 
    The Hang Seng Composite Index tracking properties and
construction stocks  .HSCIPC  and the benchmark index  .HSI 
both dropped 1.6%.

 (Reporting by Kane Wu, Julie Zhu, Clare Jim and Donny Kwok;
Editing by Shri Navaratnam)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))