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Hong Kong asset manager Value Partners ends stake sale talks with HNA: sources

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Hong Kong-listed asset manager Value Partners Group Ltd has ended talks to sell a stake in the company to Chinese conglomerate HNA Group, people familiar with the situation said.

[HONG KONG] Hong Kong-listed asset manager Value Partners Group Ltd has ended talks to sell a stake in the company to Chinese conglomerate HNA Group, people familiar with the situation said.

Value Partners said in an exchange filing late on Thursday two of its main shareholders had ended talks with a "potential offeror" to sell a stake in the company. It did not name the company it was in talks with for the stake sale.

People familiar with the matter said the announcement referred to Value Partners' talks with HNA for the stake sale.

Value Partners has previously said that two of its top four shareholders - chairman Cheng Hye Cheah and Yeh V-Nee - were in talks with a "potential offeror", without disclosing how much they were looking to sell or at what price.

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The Hong Kong asset manager had a market capitalisation of about US$2 billion as of Thursday's close, valuing the combined 19.2 per cent stake of the two shareholders at about US$385 million, according to Thomson Reuters data.

The termination of acquisition talks with Value Partners comes at a time when HNA's $50 billion worth of deal-making over the past two years has sparked intense scrutiny of its opaque ownership and use of leverage.

Pressure on HNA's finances has risen in recent months after the Chinese government told major banks in June to review their credit exposure to HNA and other non-state companies.

However, an HNA executive told Reuters in December that the conglomerate was not facing a liquidity crisis and characterised high-profile investments in Deutsche Bank and hotels group Hilton as successful.

Shares in Value Partners fell as much as 4.6 per cent in early trade in Hong Kong on Friday, before recouping some of their losses to trade down nearly 2 per cent by 0200 GMT. The bluechip Hang Seng index was 0.3 per cent higher.

The asset manager said the reason for the termination was"solely a result of the parties' commercial consideration in respect of the possible transaction".

Value Partners declined to comment beyond the exchange filing when contacted by Reuters, while HNA did not immediately respond to request for comment.

REUTERS