Ever­grande steps up $5 bil­lion Vanke spree

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

China Ever­grande Group, the coun­try’s largest prop­erty de­vel­oper, stepped up a buy­ing spree of shares in ri­val China Vanke Co Ltd in the weeks af­ter a warn­ing from the Shen­zhen Stock Ex­change that it is closely mon­i­tor­ing Ever­grande’s in­vest­ments in listed com­pa­nies.

Ever­grande boosted its stake in Vanke to 14.1 per­cent, bring­ing its to­tal ex­pen­di­ture on Vanke’s A-shares to about 36.3 bil­lion yuan ($5.3 bil­lion), ac­cord­ing to a reg­u­la­tory fil­ing on Tues­day. The Guangzhou-based home builder bought a fur­ther 509.8 mil­lion A-shares on the mar­ket and through block trades from Nov 18 to 29, the com­pany said.

Vanke’s A-shares rose 3.13 per­cent to close at 26.98 yuan per share in Shen­zhen on Wed­nes­day. The shares have surged more than 50 per­cent since early Au­gust, when Ever­grande first dis­closed a stake in the de­vel­oper.

Con­trolled by billionaire chair­man Hui Ka Yan, Ever­grande has been on a debt­funded buy­ing spree in the past year. It boosted shares in Vanke just days af­ter a Nov 11 state­ment from the Shen­zhen bourse that it has strength­ened su­per­vi­sion of trad­ing ac­counts con­trolled by Ever­grande af­ter find­ing “ab­nor­mal trad­ing be­hav­iors” that af­fected share prices of Vanke and oth­ers.

Ever­grande has emerged as the wild card in a bat­tle for con­trol at Vanke, which has been at the cen­ter of an own­er­ship bat­tle af­ter a lit­tle­known com­pany called Bao­neng Group amassed a large stake start­ing last year. Vanke has pre­vi­ously la­beled Bao­neng’s ad­vances as a “hos­tile takeover.”

Ever­grande cited Vanke’s “strong” fi­nan­cial per­for­mance as a rea­son for its in­vest­ment when it started buy­ing shares ear­lier t his year.


Pedes­tri­ans walk past an ad­ver­tise­ment board of China Vanke Co Ltd.

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