Poly shares soar on CIC stake buy, acquisition
Shares in mainland developer Poly (Hong Kong) Investments surged as much as 17.2 per cent when it resumed trading yesterday after it unveiled a HK$2.74 billion acquisition plan and introduced China Investment Corp as a long-term investor.
Poly (Hong Kong) said in an announcement late on Thursday that its parent would inject six properties into the listed vehicle. It will fund the purchase by issuing 403 million shares to its parent at HK$6.81 each, which represents a discount of 12.8 per cent to its pre-suspension closing price of HK$7.81 on September 11.
The assets to be acquired are commercial and residential investment properties in Shanghai, Guangzhou, Shenzhen, Suzhou, Foshan and Hainan with a total gross floor area of 2.14 million square metres.
Poly (Hong Kong) said the deal would increase its land bank by 22 per cent to 11.5 million sq metres and its geographical coverage from 12 to 14 mainland cities.
At the same time, Poly (Hong Kong) is selling 60 million shares to China Investment Corp, the country's US$200 billion sovereign wealth fund, also at HK$6.81 each apiece, or a total of HK$408.6 million.
The shares have a lock-up period of six months, but Poly (Hong Kong) said CIC intended to treat it as a long-term investment. CIC's 2.3 per cent stake marks its first foray into a Hong Kong-listed mainland company.
Parent China Poly Group Corp's stake will increase to 58.1 per cent from 51.9 per cent.
The asset injection has long been expected by market watchers and analysts believe more acquisitions are in the pipeline as China Poly Group will eventually be merged with mainland-listed Poly Real Estate Group.
Poly shares closed at HK$9.02, up 15.5 per cent.