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China Vanke, in spat with major shareholder, says may issue new shares
[HONG KONG] China Vanke Co Ltd, the country's largest property developer, said on Tuesday it may issue new shares to acquire a company - a move that could dilute the value of its shares amid tension with its biggest shareholder.
It said in a filing to the Hong Kong bourse that it was looking at acquiring a company in a share and cash deal, and that it could issue new A shares or H shares. It said it had entered into a letter of intent but did not name the company or the owner of the company.
However, it also said that a deal was not certain and that it was in discussions with other parties in addition to the potential vendor.
Vanke is locked in a high-profile battle with Baoneng Group, a property and insurance conglomerate that became its biggest shareholder after buying a stake of more than 20 per cent via unit Shenzhen Jushenghua Co and affiliate Foresea Life Insurance.
Vanke Chairman Wang Shi has said Baoneng lacks credibility and would damage Vanke. Baoneng has responded that it has a good reputation and has strictly abided by the law.
China's securities regulator has said it is studying Baoneng's acquisition of its stake in Vanke to see if any rules were violated.