You are here
Evergrande signals bid for control of rival developer Langfang
[SHANGHAI] Billionaire Hui Ka Yan's China Evergrande Group, which last week made a surprise entry into an ownership tussle for the nation's largest residential developer, signaled its ambition to obtain control in another Chinese firm.
Evergrande, which boosted its stake in Shanghai-traded Langfang Development Co to 15 per cent in the past four months, plans to further increase its holdings and doesn't exclude the possibility of obtaining actual control of the firm, Langfang said in a filing Wednesday, citing Evergrande response to a Shanghai exchange inquiry asking for more disclosure on the purchases.
Evergrande also raised the possibility of participating in the management of the developer, even though it currently doesn't have a "clear plan" to restructure the company.
"Deep-pocketed Evergrande appears to have a strong will to fight for control," China Investment Securities Co's Beijing-based analyst Li Shaoming said, adding that Langfang's long-standing largest holder may not want to give up their controlling position easily.
Moves by Evergrande to amass stakes in Langfang, based in Hebei, a city adjacent to Beijing, comes after it bought a 5 per cent stake in China Vanke Co earlier this month.
Led by Chairman Hui, Evergrande is known for an aggressive business style and may eventually turn the Vanke stake into a strategic investment, according to analysts from JPMorgan Chase & Co.
Evergrande has been on an acquisition spree in the past year, including paying 3.6 billion yuan (S$726.5 million) for a major stake in Shenzhen-listed China Calxon Group Co.
Last year, it acquired Mass Mutual Tower in Hong Kong and agreed to buy assets from New World China Land Ltd.