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. Vanke ends rescue plan as Evergrande declares hand, tipping balance in shareholders “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. The stake-chasing game is no longer a catalyst for Vanke after the central government moved to clamp down on “barbaric” leveraged buyouts in the stock markets at the beginning of this month. Authorities have sent inspection teams to Vanke’s two leading contenders, Baoneng Group and Evergrande, over potential irregularities. Insurance conglomerate Baoneng had accumulated a 25.4 per cent stake in Vanke during the December to July period and had not bought any Vanke shares since then. It remains the developer’s largest shareholder. Vanke shares in both Shenzhen and Hong Kong have tumbled more than 20 per cent since mainland regulators checked on Baoneng and Evergrande. ICBC International Securities analysts downgraded Vanke to “sell” on Monday, saying active equity trading in Vanke was coming to an end and would not support Vanke price performance anymore. Vanke shares stayed strong compared with peers despite the central government rolling out a raft of tough measures to cool the housing market in the past few months. “As the tightening policies continue to take effect, Vanke share prices will see further corrections in the coming weeks,” ICBC analysts said.