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China tycoon Wang considers delisting Wanda unit
[HONG KONG] China's richest man billionaire Wang Jianlin is considering buying back the Hong Kong-listed shares of a subsidiary of his Dalian Wanda empire, having seen its value plunge a little more than a year after listing.
Shares in Wanda Commercial - one of the world's largest developers of shopping malls with dozens across China - soared 20 per cent after news late Wednesday that Mr Wang was looking at a privatisation.
The firm listed in December 2014 after a US$3.7 billion initial public offering - the biggest in Hong Kong for a real estate firm - but its share price tumbled as the mainland property market slowed sharply.
Shares in the company were initially priced at HK$48 and peaked at HK$77 in June last year, but fell nearly 60 per cent to HK$32 in February. Mr Wang is looking at paying HK$48 a share, a 24 per cent premium to its Wednesday closing price.
In a sign of the possible problems ahead, Wanda slashed its IPO fundraising target by about a third from the original goal before listing, possibly to attract investors concerned by the slowing real estate market.
The volatility matched those of the wider stock Hang Seng Index, which soared to multi-year highs in April, when Chinese authorities relaxed rules on trading, before slumping in line with global markets during the summer.
"The company's controlling shareholder has informed the company that it is in the preliminary phase of considering a voluntary general offer... which, if proceeded with, could result in the privatisation and delisting of the company from the stock exchange," the company said in a statement to the Hong Kong stock exchange.
However, it added that there was "no certainty" the privatisation would proceed.
Analyst Jackson Wong told AFP on Thursday that the "lacklustre performance on the stock price might be the main reason" for Mr Wang's latest consideration.
"The whole sector has been going down along with the Hang Seng Index," Wong, associate director of Simsen Financial Group, said in describing the Chinese property market.
"The chairman is trying to privatise the company, make it run smoothly because it's such a big enterprise." Kingston Securities executive director of research Dickie Wong said Wang privatisation was the right decision, adding: "Obviously this company is worth more" than the share price.
Mr Wang has a net worth of US$29.9 billion, according to Bloomberg Billionaires, followed closely by Internet entrepreneur Jack Ma.
The Wanda Group bought US cinema chain AMC Entertainment Holdings in 2012 and has also branched out into film production, theme parks, print media and art investment.
Mr Wang has said he wants the company to rival world leading brands such as Google, IBM and Walmart.