China Resources seals neat exit from builder brawl

Vanke Overseas Investment Holding

13/01/2017 03:40

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are her own.) 
    By Kathy Gao 
    HONG KONG, Jan 13 (Reuters Breakingviews) - The $5.9 bln 
sale of its entire stake in China Vanke to Shenzhen Metro allows 
the conglomerate to extract itself from a boardroom fight at an 
attractive price. It looks like the beginning of the end for a 
spat that has irked regulators. Other shareholders may follow 
its lead. 
          
    Full view will be published shortly. 
    On Twitter https://twitter.com/kathy_gao 
     
    CONTEXT NEWS 
    - China Vanke, the country's second biggest property 
developer by sales, said on Jan. 12 that its No.2 shareholder 
China Resources Group will sell its entire stake to state-owned 
Shenzhen Metro Group.  
    - Vanke will transfer 1.69 billion Shenzhen-listed A shares, 
equivalent to a 15.3 percent stake, at 22 yuan per share. It 
values the total transaction at 37.2 billion yuan ($5.40 
billion) according to a stock exchange filing.  
    - The disposal comes after Vanke called off an asset swap 
worth $6.9 billion with Shenzhen Metro in December after the 
property developer failed to get the support of major 
shareholders.  The deal would have seen Shenzhen Metro becoming 
Vanke's largest investor.  
    - China Resources previously opposed the Shenzhen Metro deal 
but had said it was not working with financial conglomerate 
Baoneng, Vanke's largest shareholder, to remove the developer's 
entire board of directors. Baoneng has built up a 25 percent 
stake in Vanke.  
    - Vanke's A-shares were trading up nearly 7 percent by 
mid-morning local time on Jan. 13.  
    - On Jan. 13, Evergrande said that it has no plans to buy 
more Vanke shares and that it will account for its stake as 
available-for-sale financial assets. The property developer is 
Vanke's third biggest shareholder. 
 
    -  For previous columns by the author, Reuters customers can 
click on  GAO/  
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Vanke stock filing    http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0112/LTN20170112719.pdf 
Evergrande statement on acquisition of Vanke shares    http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0113/LTN20170113015.pdf 
China Vanke's No. 2 shareholder sells stake to Shenzhen Metro 
amid power tussle     urn:newsml:reuters.com:*:nL4N1F21ZZ 
Chinese developer Vanke calls off deal to acquire Shenzhen Metro 
property unit      urn:newsml:reuters.com:*:nL4N1ED09T 
BREAKINGVIEWS- Evergrande's M&A misadventure is costly      
 urn:newsml:reuters.com:*:nL4N1EH1MI 
BREAKINGVIEWS-China regulator has healthy fear of goblin raids   
   urn:newsml:reuters.com:*:nL4N1E113V 
BREAKINGVIEWS-Chinese insurer's board battle could backfire    
 urn:newsml:reuters.com:*:nL4N1DO16S 
BREAKINGVIEWS-Vanke battle is test of China's shareholder rules  
   urn:newsml:reuters.com:*:nL4N19T1PM 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Editing by Una Galani and Nicolle Liu) 
 ((kathy.gao@thomsonreuters.com; Reuters Messaging: 
kathy.gao.thomsonreuters.com@reuters.net)) 
 
Keywords: VANKE STOCKS/BREAKINGVIEWS