Blackstone to buy out office developer SOHO China in HK$23.7b deal

Hong Kong

BLACKSTONE Group Inc will take control of SOHO China Ltd in a HK$23.7 billion (S$4.1 billion) deal and maintain its stock market listing, the Chinese office developer said in a filing on Wednesday, while the founders will retain a 9 per cent stake.

The US private equity firm will offer HK$5 per share, 31.6 per cent higher than the last closing price of HK$3.8 on Friday, in what would be its largest real estate deal in China.

SOHO China's shares jumped as much as 25.8 per cent to HK$4.78 early on Thursday, as they resumed trading after being suspended since Tuesday.

Blackstone, which currently owns around six million square metres (65 million square feet) of properties in China, is seeking to expand there as it is confident about the country's long-term economic prospects and the Beijing and Shanghai office market, the filing said.

SOHO China, a major developer well known for its futuristic office buildings on the mainland, has 1.3 million square meters of commercial properties in the country.

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The company is 64 per cent owned by the husband-and-wife founding team of chairman Pan Shiyi and chief executive Zhang Xin.

After the deal, they will become its second-largest shareholder with a 9 per cent interest.

The offer is conditional on Chinese competition authorities granting clearance, the filing added.

Founded in 1995, SOHO China went public in Hong Kong in 2007.

Its shares have gained 62 per cent in the past month and it had a market value of US$2.55 billion at the stock's last close, according to Refinitiv data.

The company has been scouting for buyers for its prime commercial property assets as the founders looked to shift their focus to overseas markets.

Reuters reported last year Blackstone was in exclusive talks to take SOHO China private in a US$4 billion deal, but later halted the talks. REUTERS