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Chinese developer Vanke calls off deal to acquire Shenzhen Metro property unit
[HONG KONG] China Vanke Co Ltd, the mainland's biggest property company by sales, said on Sunday it was terminating a key agreement to acquire a property development arm of Shenzhen Metro Group after it failed to get the approval of some of its major shareholders.
Vanke is the subject of of complex corporate power struggle with Chinese financial conglomerate Baoneng seeking to oust the management, having built up a 25 per cent stake in Vanke.
Fearing a hostile takeover attempt by Baoneng, Vanke announced in June it had agreed to buy the property unit of white knight Shenzhen Metro Group for US$6.9 billion in shares, which would have made the state-owned subway operator its biggiest shareholder.
Both Baoneng and China Resources Group, its two major shareholders, had said they would oppose the deal.
Vanke said on Sunday it had been engaged in talks with shareholders on the purchase of SZMC Qianhai International Development Co Ltd, which owns property developments above the metro facilities in Shenzhen, and proposed amendments to the deal. "However, as of the date of this announcement, the relevant parties have yet been able to reach a consensus on the details of the acquisition," it said, without naming any of its shareholders opposed to the deal.
Vanke does not expect the termination of the acquisition to have any "material adverse impacts" on its short-term financial position, the company said in its statement filed with the Hong Kong exchange late on Sunday.