Baoneng aligns with China Resources in opposing Vanke’s Shenzhen Metro deal
The two major shareholders own 39.57 per cent of the business, enough to block the proposal
In a major twist to events in the long-running takeover saga, China Vanke’s largest shareholder has aligned with its second-largest shareholder to oppose a restructuring plan proposed by Vanke’s management.
Baoneng Group, which currently owns 24.26 per cent of Vanke’s share, on Thursday underlined its opposition to chairman Wang Shi and his management’s proposal to introduce Shenzhen Metro as the largest shareholder in the 45.6 billion yuan share-for-asset deal.
The move echoed with a statement issued on Thursday night by China Resources Holding, the second largest shareholder, that reiterated its opposition to the deal.
The alliance reduces the possibility that the proposal could be passed without major overhaul, as combined, China Resources and Baoneng hold 39.57 per cent of the business, enough to block the proposal. .
Vanke proposed the 45.6 billion yuan acquisition of a unit of Shenzhen Metro Group in a deal to be paid through the sale of Vanke shares.
In both their statements, Baoneng and China Resources reinforced their doubts about whether the Vanke management was fairly representing shareholders’ interests, and claimed it’s running has now been overshadowed by “insider control”, a phenomenon whereby controlling rights in companies are actually seized by management whose own interests are strongly represented.