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China Vanke shares climb as Evergrande buys stake, adding new twist to power struggle
[HONG KONG] Shares of developer China Vanke Co Lt]d jumped on Friday after peer China Evergrande Group bought a nearly 5 per cent stake, adding a new twist to a battle for control of the country's biggest residential property firm.
Vanke's Shenzhen shares gained more than 6 per cent after the country's second-largest property developer said late on Thursday it had acquired a 4.68 per cent stake for 9.1 billion yuan (S$1.9 billion). The move makes Evergrande Vanke's fourth-largest shareholder, behind Anbang Insurance, which holds more than 6 per cent.
By 0245 GMT, Vanke's Shenzhen shares had dropped back but were still up more than 2 per cent on Friday, while its Hong Kong-listed stock was up 3 per cent. The benchmark Hang Seng Index rose more than 1 percent.
The move by Guangzhou-based Evergrande is the latest round in a power tussle that has seen Vanke try to fend off a potential hostile takeover by privately owned conglomerate Baoneng Group, a battle that has drawn the scrutiny of regulators.
Last year, Baoneng displaced state-owned China Resources as Vanke's largest stakeholder. Vanke chairman Wang Shi openly opposed the move, calling Baoneng "barbarians" with no credibility.
Evergrande investors also welcomed the move on Friday, its shares surging more than 6 per cent early on Friday. "Vanke is one of the largest property developers in (China) with strong results. The acquisition is an investment in the group," Evergrande chairman Hui Ka-yan said in a statement to the Hong Kong stock exchange.