China Vanke to Detail Revamp Plan as Investor Showdown Looms

Updated on
  • Shares to resume trading by Jan. 18 if no further delay sought
  • Investor Baoneng defends reputation, saying it follows law

China Vanke Co. plans to disclose details of a restructuring plan by January as the nation’s largest homebuilder looks set for a showdown with its biggest shareholder, a group backed by Baoneng Group.

Vanke, whose shares were suspended on Friday, said trading will restart by Jan. 18, should the board fail to convene and seek a delay in their resumption by that date, or if the Shenzhen stock exchange doesn’t approve an extension of the trading halt. The announcement comes after Vanke Chairman Wang Shi said “see you on Monday” in a posting Saturday on his Weibo account, and Baoneng defended its reputation in an exchange filing.

Vanke, which develops residential properties in Shenzhen, Shanghai, Beijing and other big Chinese cities is the world’s largest listed property company with a market capitalization of more than $40 billion. Baoneng Group replaced China Resources Co. as its largest shareholder this month, prompting the rare public spat. The suspension of trading, pending a share sale, has sparked speculation it’s seeking to dilute Baoneng Group’s ownership.

Vanke faces a hostile takeover bid by the Baoneng-backed group, Vanke President Yu Liang said Friday. Wang said the company doesn’t welcome Baoneng Group and its affiliates, which lack credibility and may have a negative impact on Vanke’s credit ratings and reputation, according to a transcript of an internal meeting obtained by Bloomberg News, the contents of which were confirmed by the company.

Baoneng Group said in a statement on its website Friday that it has a “good” reputation, follows the law and believes in the power of the market.

Trading Suspension

Vanke said in Sunday’s statement that after its shares resume trading, it wouldn’t seek a suspension again within three months for the purpose of asset restructuring. It’ll urge intermediaries including independent financial advisers and valuers to speed up their work and will disclose restructuring documents according to the expected timeframe, it added.

“This could potentially be a counterattack by Vanke to Baoneng,” said David Hong, a Hong Kong-based director of China Real Estate Information Corp. “Vanke may try to introduce a third-party investor.”

Wang removed the Weibo post hours after publishing it Saturday.

“The healthy development of a listed company is inseparable from the support of its employees, customers, suppliers and communities,” Wang said in a later posting. “When making business decisions, a company not only must consider the interests of its shareholders, but also those of related stakeholders.”

A hostile takeover “disregards the related interests of society,” he said.

Baoneng Group’s consortium, composed of two entities called Shenzhen Jushenghua Co. and Foresea Life Insurance Co., increased their stake in Vanke to 22.45 percent as of Dec. 11, from less than 5 percent, within five months.

Vanke’s shares rose by the 10 percent daily limit in Shenzhen for a second straight day Friday before they were halted. The shares have advanced 76 percent this year.

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