Taking Wanda Commercial private may prove premature

Hong Kong

CLOSING off a funding avenue is an unusual measure for acquisitive companies, especially one such as Dalian Wanda Group, which has spent billions buying up everything from cinema chains to triathlon organisers. But that's exactly what Chinese tycoon Wang Jianlin is planning with his proposal to take Dalian Wanda Commercial Properties private in a deal worth at least US$4 billion.

On the face of it, such a move makes sense, even if at HK$48 (S$8.30) a share it's exactly the same price at which the real estate company went public in Hong Kong in December 2014. Stock in the shopping malls and property unit had more than halved from its June peak, before Thursday's intraday 22 per cent jump in response to Mr Wang's plan. With Wanda Commercial's sales forecast to decline by a third this year, there seems little chance of any sustained revival, despite 13 of the 16 analysts surveyed by Bloomberg calling it a buy.