Wanda’s US$9.3b sale becomes a threesome under the spotlight as it ropes in R&F with Sunac

Chinese magnate Wang Jianlin has roped in a business partner from Guangdong province to take 77 hotel assets off his hands, in a surprising 11th hour twist to the country’s largest real estate sale, as close regulatory scrutiny on the original buyer compelled initial plans to be scuttled.

Wanda Group, founded in 1988 by Wang, will sell the hotels for 19.9 billion yuan (US$3 billion) to Guangzhou R&F Properties, one of the biggest developers in Guangdong province. Sunac China, which has also been under the regulator’s spotlight, will pay 43.8 billion yuan to buy 13 tourism-related projects including theme parks from Wanda, scaling back a 63.7 billion yuan acquisition announced nine days earlier.

“It is a win-win-win for all our three parties and will largely reduce Wanda’s debt,” Wang said at a hastily assembled press conference at the Sofitel Hotel in his flagship Wanda plaza in Beijing. “It’s also a big step forward in our asset-light transformation.”

The signing ceremony and press conference was an exercise in spontaneity. The backdrop at the signing ceremony was changed from a tripartite event into just Wanda and Sunac, and then changed back to featuring the three companies, while the entire proceeding was delayed for more than an hour. Officials at the event did not explain the hasty changes.

Wanda and Sunac are among a handful of asset buyers in China that have been placed under the spotlight for their profligate deal making and acquisitions around the world, with the bank regulator last month instructing lenders to watch for their loan exposures.