Vanke Teams Up With Anbang to Counter Possible Takeover
December 23 2015 - 9:40PM
Dow Jones News
SHANGHAI—China Vanke Co., the largest home-builder in the world
by sales, has signed up a heavyweight ally to counter a possible
unsolicited takeover attempt by a local rival.
Vanke said in a statement late Wednesday that it welcomes Anbang
Insurance Group of China to be a major shareholder of the company.
Anbang has significantly increased its stake in Vanke in recent
weeks, and now owns 7% of Vanke, becoming the third-largest
shareholder of the developer.
Beijing-based Anbang, which last year bought Manhattan's Waldorf
Astoria hotel, said in a statement Wednesday that it is bullish on
Vanke's prospects and will cooperate with Vanke on property
developments as well as real-estate financing.
"Anbang Insurance Group is a world-renowned Chinese company, and
a respectable professional investor," said Vanke. "The company is
in the midst of transformation and we need support from insurance
capital," it added.
Speculation over Vanke's future has been rife after
Shenzhen-based Baoneng Group, a privately owned property-to-finance
conglomerate, started buying up shares in Vanke in August and
unseated state-owned China Resources Group as its largest
shareholder. Baoneng now owns 23.5% of Vanke, while China Resources
owns a 17.4% stake.
According to Chinese securities laws, once a bidder owns 30% of
a listed company, it shall issue a tender offer to all the
shareholders of the listed company to purchase all or part of the
company's shares.
Vanke said this week that it will announce no later than Jan. 18
a restructuring plan which could involve issuing new shares. That
could dilute a bidder's interest in the company and increase the
cost of a bid substantially, which analysts see as a poison pill
strategy designed to thwart any takeover attempt by Baoneng. The
company's shares have been halted from trading since Friday.
"Vanke is widely regarded as the benchmark company in China's
property industry. It has the best management team, the most
recognized brand and credibility," said Anbang. "We are optimistic
about Vanke, and will support its development in an active
manner."
Anbang has been one of the most acquisitive Chinese companies in
the past year. Earlier this year, it agreed to buy and recapitalize
Vivat, the insurance arm of SNS Reaal, a financial group owned by
the Dutch government. In February, it agreed to buy a controlling
stake in South Korean life insurer Tong Yang Life Insurance Co. for
around $1 billion. It is also buying Fidelity & Guaranty Life
in a $1.57 billion deal, which will make the Chinese company one of
the largest insurers by market share in fixed indexed annuity
products in the U.S.
Vanke has said it doesn't welcome Baoneng because the company
lacks credibility and financing capacity. Wang Shi, Chairman of
Vanke, cited Baoneng's poor track record of developing projects,
noting that Baoneng's property transactions totaled just billions
of yuan last year, according to a transcript of talks Mr. Wang held
with investors reviewed by The Wall Street Journal last week.
Officials from Baoneng weren't immediately available for comment
on Thursday. Baoneng said Friday on its website that it "legally
operates its business, has created huge value for society and its
customers, and has a good name in the market."
Rose Yu
(END) Dow Jones Newswires
December 23, 2015 21:25 ET (02:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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