China Vanke 2202

[winston]

not vested

Vanke reveals deal

China Vanke (2202) has revealed it signed a non-legal binding transaction deal with a potential partner on December 25 as it restructured in moves to avoid a hostile takeover.

The company was talking with a number of parties in addition to "continuing negotiations with the potential party," Vanke said yesterday.

China's largest developer had on December 18 suspended trading of its A shares as it tries to dilute the holding of largest shareholder Baoneng Group, which Vanke has said is aiming at a "hostile takeover."

And Vanke's H shares, which had also been suspended, plunged 10.65 percent to close at HK$17.62 before the statement. They have lost 23 percent since resuming trading on January 6.

Baoneng Group has raised its stake in Vanke to 24.3 percent from less than 5 percent in five months, using highly leveraged bank loans.

Vanke's former largest shareholder, state-owned China Resources, holds 15.29 percent of shares, while newly introduced partner Anbang Insurance Group has boosted its stake to 7.01 percent.

Vanke's management holds only 4.14 percent of the company.

Source: The Standard

[winston]

not vested

China Vanke Signs On Shenzhen Metro: The Rise Of A Mega SOE Developer?

By Shuli Ren

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... developer/

[winston]

Vanke Slumps On $6.9 Billion Share Sale Dilution; China Resources Objects

By Shuli Ren

The saga on who will control China Vanke (2202.Hong Kong), the largest real estate developer in China, is set to continue.

After the Friday market close, Vanke proposed to buy two projects from Shenzhen Metro at 45.6 billion yuan ($6.9 billion), by issuing 2.9 billion new shares, or 26% of existing capital at 15.88 yuan each. This proposed share sale represents 35% discount to its mainland A-share’s last close and 7% premium to its Hong Kong share’s last close.

If this deal goes through, Shenzhen Metro would become the largest shareholder, with 20.65% of stake. The trouble-maker barbarian-at-the-gate corporate raider Baoneng would have 19.3% stake, and state-owned China Resources Holdings would have 12.1% stake.

Vanke’s Hong Kong listed shares fell 3.2% this morning even though the proposed share sale was at a premium.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... s-objects/

[behappyalways]

vanke-s-travails-show-corporate-raiders-can-win-in-china
http://www.bloomberg.com/gadfly/article ... n-in-china

[behappyalways]

Intensifying Battle over Who Controls Vanke
http://english.caixin.com/2016-06-24/100958411.html

[behappyalways]

No Victor Yet in Battle for Developer Vanke
http://english.caixin.com/2016-07-05/100962368.html

[behappyalways]

Baoneng Increases Collateral as Vanke Stocks Tumble
http://english.caixin.com/2016-07-14/100966310.html

[winston]

China Resources holds key to Vanke struggle

by Esther Yu

Amid the power play at one of the world's largest property developers Vanke, all eyes are on China Resources, which holds the third highest stake in the firm.

Whether China resources will stand with Vanke's chairman Wang Shi or Baoneng group remains uncertain, but the state-backed firm is chaired by Fu Yuning who is said to be making his decision based on the long-term interest of Vanke and his firm.

Fu replaced Song Lin to become the chairman of China Resources two years ago, before then he worked at state- owned conglomerate China Merchants Group for 15 years, four years as chairman.

In a book written by founding president and chief executive of Capitaland Group Liew Mun Leong, who is also the chairman of Changi Airport Group, it was revealed that Fu turned down a high paying job in Singapore to remain in China in 1989.

Liew said he was carrying out headhunting work for the Singapore government back at that time, where he had found Chinese engineers graduated from Cambridge, Oxford and Harvard, about 50 of them agree to go.

It had come to Liew's attention that Fu was a talent in the field. Thinking that the Tiananmen Square incident was a great time to recruit from China, Liew flew to Beijing to meet Fu and offered him a senior analyst's post with attractive terms including Singaporean citizenship and a salary several times higher than his post in China Merchants.

But Fu turned him down, saying that fate has driven him back to China and he did not want to abandon the country in time of political instability.

When Fu became the chief executive of China Merchants in his 40s, Liew said that his patriotism had been rewarded and Singapore had been denied China's best talent.

Source: The Standard

[behappyalways]

Vanke Saga Takes New Twist With Surprise Entry of Evergrande
http://www.bloomberg.com/news/articles/ ... evergrande

[winston]

Should Investors Ride The Tide With Vanke?

By Shuli Ren

China’s largest real estate developer Vanke‘s (000002.China/2202.Hong Kong) Shenzhen-listed shares soared 8.6% this morning as investors bet competitors from Evergrande Real Estate (3333.Hong Kong) to Sunac China (1918.Hong Kong) will snap up its shares for more influence in Vanke’s management.

Vanke’s A-shares have risen 27% in the last three trading days.

Last week, Vanke got a limit-up boost after competitor Evergrande paid 9.1 billion yuan ($1.4 billion) for 4.7% stake in Vanke. “We think Evergrande is buying so that they can have some say in Vanke’s management,” commented J.P. Morgan. Vanke’s current management will be up for re-election at next year’s annual shareholders’ meeting.

Vanke is in popular demand. The Paper rumored this morning that another competitor Sunac China (1918.Hong Kong) has already paid 1 billion yuan for Vanke stakes, providing further boost to Vanke’s shares.

So should retail investors ride the tide as Vanke’s competitors buy in? In December, Vanke’s A-shares soared over 200% in just over a month upon rumors of Baoneng‘s hostile takeover bids.

It will depend on whether competitors such as Evergrande will buy more shares. J. P. Morgan thinks the condition is ripe:

We think Evergrande is hoping to have influence in Vanke, and we expect this will eventually turn into a strategic investment. Evergrande has a track record of hostile takeover attempts, including its acquisition into Huaxia Bank (600015.CH) in Jan 2014 and Shengjing Bank (2066.HK) in Feb 2016.

Hence we will not be surprised if this is another attempt given Vanke’s management is now busy dealing with the deadlock among CR Group and Baoneng.

China’s credit situation is quite loose, and with Chairman Xu increasing political power in China, we observed that banks are being more generous to Evergrande than other corporates.

However, why should retail investors be involved in this murky business? Baoneng for one used heavy-handed leverage to accumulate a 25% stake. Check out Bloomberg‘s story this morning “Hostile Raid on China Developer Flashes Shadow-Banking Warnings“. Retail investors who bought at the end of last year have not recovered their costs yet and may find themselves disappointed again.

Rather, Vanke’s H-shares are more reasonably priced, trading at a good 30% discount to its A-shares, and offers a handsome 4.5% dividend yield. The H-shares rose 3.4% this morning.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... ith-vanke/