China's Evergrande Real Estate has bought a stake worth more than $1 billion in the nation's biggest property company Vanke — the latest development in an ongoing tussle over control of the firm.
Bosses of Vanke, China's largest residential developer by sales, have for months been trying to stave off what would be the country's first hostile blue-chip takeover, after a private conglomerate purchased a more than 20 per cent stake. Evergrande announced it had paid 9.11 billion yuan ($ 1.37 billion) for 4.68 per cent of Vanke shares in a statement filed to the Hong Kong stock exchange on Thursday.
"Vanke is one of the largest property developers in China with strong results. The acquisition is an investment of the group," it said. Vanke confirmed the deal today in a statement to the Shenzhen exchange, where its shares traded up 6.5 per cent by the close. Share prices on the Hong Kong exchange were also boosted 1.6 per cent by the end of play. It is not yet clear where Evergrande fit in to the tussle for Vanke, which has been triggered by private conglomerate Baoneng. With an eye on its valuable land bank, Baoneng began buying shares in Vanke last year, becoming its largest shareholder in December with a 24.26 per cent stake. In December, Vanke's founder, 65-year-old Wang Shi, asked for its dual-listed shares to be suspended in Shenzhen and Hong Kong, blocking Baoneng from any further purchases.
It announced in June a 45.6 billion yuan asset swap and restructuring that would see state-owned subway operator Shenzhen Metro Group overtake Baoneng as its biggest shareholder.