China Vanke shares tumble after restructuring plan falls flat
Top homebuilder slumps 6pc in Shenzhen after leading shareholder and rival Evergrande says it is not seeking control
Shares of China Vanke, the country’s largest homebuilder which is embroiled in a long-running takeover tussle, slumped on Monday as the firm scrapped a “white knight” plan after a leading contender declared it had no intention to control the company.
Vanke fell 6.06 per cent in Shenzhen to 21.10 yuan while its Hong Kong shares dipped 3.21 per cent to HK$18.72 by the close on Monday.
The share tumble came after Vanke decided to drop a plan to introduce state-owned Shenzhen Metro as its major shareholder by issuing new shares in a bid to fend off a potential hostile takeover. The announcement followed a declaration by China Evergrande Group, the third-largest Vanke shareholder with 14.07 per cent stake as well as Vanke’s rival, saying it had no intention of seizing control of Vanke.
“We have no intention to, and we will not, become the controlling shareholder of China Vanke,” Evergrande’s vice chairman and president Xia Haijun said during an interview with state broadcaster CCTV on Saturday.
Expectations that Evergrande would continuously increase its stake in Vanke have, since August, sent Vanke’s Shenzhen A-shares from 17.88 yuan to at one stage hit a record 27.72 yuan.
