[HONG KONG] Dalian Wanda Commercial Properties Co Ltd said on Monday that shareholders have approved its plan to delist from the Hong Kong stock exchange via a US$4.4 billion buyout, in what would be the bourse's biggest-ever delisting.
The developer, with a market value of US$30 billion and a 14 per cent free-floating stock, said 88.5 per cent of independent shareholders voted in favour of the plan, while 7.3 per cent of shareholders voted against it at an extraordinary meeting held in Beijing on Monday.
Parent Dalian Wanda Group, owned by China's richest man, Wang Jianlin, offered HK$52.8 a share to buy out the Hong Kong-listed property unit, aiming to take it private before relisting it in China where it hopes for a higher valuation.
Firms typically command higher valuations in mainland China than in Hong Kong due to a large pool of retail investors. Wanda Commercial has told investors it expects a valuation three times higher in China where its brand is more recognised.
A higher valuation would allow Wanda Commercial to reduce funding costs, either through issuing new shares or via stock swaps in acquisition deals.
Market watchers have said the buyout could encourage other Hong Kong-listed Chinese firms to follow suit, tarnishing the territory's image as a major financial centre.
Ahead of the vote, major Wanda Commercial shareholders including China Life Insurance Co Ltd and the Kuwait Investment Authority had said they were in favour of the buyout, as did influential proxy advisors ISS and Glass Lewis.
Foreign investors have been selling shares of property firms focusing on China, where the soaring cost of land has squeezed developers' margins. In smaller cities where Wanda has several projects, sales are declining as supply outstrips demand.
Observers have said another reason for shareholders voting in favour was the prospect of the share price falling back to levels before the buyout was first announced, at around HK$38.8.
Trading of Wanda Commercial shares will resume on Tuesday after being suspended on Monday pending the result of the shareholder vote. Before suspension, they were trading 3 per cent below the offer price, at HK$51.2.