Vanke Teams Up With Anbang to Counter Possible Takeover

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)

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