Glorious Property Holdings Ltd. (845)’s shareholders rejected an offer by Chinese billionaire Zhang Zhirong to take the Hong Kong-listed property developer private.
The proposal didn’t gain enough support at a meeting in Hong Kong and lapsed, the company said in a statement to the city’s stock exchange. Zhang, who has a 68.4 percent stake in Glorious Property, offered as much as HK$4.57 billion ($589 million) for the developer, according to a November filing.
A total of 62 investors voted against the plan, while 58 holders voted in favor, according to today’s filing. Zhang can’t make another bid for 12 months, except with regulatory consent, the company said. The shares were halted today pending the results of the meeting and will resume trading in H.K. on Jan. 20. The stock was unchanged at HK$1.71 yesterday.
Contracted sales by the developer, which has residential, office and retail projects in 12 Chinese cities, slumped 33 percent last year amid property curbs aimed at cooling China’s housing market. Developers, including Glorious Property, face rising default risks as funding options narrow, according to Standard & Poor’s.
Zhang had offered to pay HK$1.80 a share for Glorious Property, 45 percent more than the then most-recent price of HK$1.24, for all outstanding stock, the November filing showed. Glorious Property surged as much as 40 percent after the buyout plan was announced, the biggest intraday gain since the shares debuted in October 2009, and closed 33 percent higher.
The company’s shares traded at less than half their net asset value before the offer, tracking a slide in China Rongsheng Heavy Industries Group Holdings Ltd. (1101) after the shipyard co-founded by Zhang sought a government bailout. Zhang quit as chairman of both Glorious Property and Rongsheng in November 2012.
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