The Real Deal New York

Vanke loses $10B in market value amid takeover uncertainty

Chinese regulators may block acquisition by Evergrande

December 21, 2016 11:05AM

Wang Shi

Chinese development giant China Vanke has lost $10 billion in market value in December, as investors are selling off shares amid fears that government intervention could complicate the company’s takeover.

Rival real estate firms China Evergrande Group and Baoneng Group are battling to take over China’s largest public real estate company. But Beijing regulators recently indicated they might crack down on leveraged buyouts, putting a deal in question. China Vanke’s stock has fallen by 23 percent this month.

Earlier this month China’s securities regulator described insurance companies that engage in leveraged buyouts as “robbers” and vowed to toughen rules.

And on Saturday, Evergrande’s president said his firm does not plan on acquiring a controlling stake in Vanke.

“All the news for them is bad,” CIMB Securities analyst Raymond Cheng told Bloomberg. “Previously shares were up a lot because Evergrande kept buying. Now they are under a lot of pressure.”

China Vanke has partnered with Slate Property Group and Adam America Real Estate on three development deals, including the controversial Rivington House condo conversion. It also holds a stake in RFR Realty’s condo tower 100 East 53rd Street. [Bloomberg]Konrad Putzier

MENU