Future Land shares soar to near record in Hong Kong on founder’s plan to take developer private

Shares of Future Land Development jumped almost 14 per cent to an 11-day intraday high in Hong Kong on Wednesday, after the developer unveiled plans to take its business private.

Future Land’s shares soared to HK$3.20 in Hong Kong when trading resumed after a seven-day halt, near to its all time high, and closed at HK$3.18. Trading volume expanded to 640 million, the most heavily traded among Chinese property companies listed on the city’s bourse.

Future Land’s chairman Wang Zhenhua had offered HK$3.3 per share cash to buy all the outstanding shares in the Shanghai-based developer, for a total consideration of HK$5.1 billion.

“Since its listing in 2012, the company’s share price performance has not been satisfactory,” Wang said in a company filing Tuesday, adding that the depressed share price has had “an adverse impact” on the company’s reputation in the market, and therefore on its business, and also on employee morale.

The company is the latest in a list of property developers that are seeking to delist from the Hong Kong stock exchange, where the benchmark Hang Seng Index, and the Hang Seng China Enterprises Index trade at the lowest price-earnings ratios among Asia’s major equity bourses.

Last year, Dalian Wanda Commercial Properties delisted from Hong Kong for the same reasons and planned to relist its entity on the mainland stock market for better valuation, but has not made any progress on the transfer so far.