Shenzhen Metro agrees to pay $5.4 billion to become No 2 shareholder

China Evergrande Group, controlled by billionaire Hui Ka Yan, said it has “no intention” of increasing its stake in rival China Vanke Co, after Shenzhen Metro Group Co struck a deal to become the developer’s second-biggest shareholder.

Shenzhen Metro agreed to buy China Resources Co’s 15.3 percent stake in Vanke for 37.2 billion yuan ($5.4 billion), Vanke said in a statement to the Shenzhen Stock Exchange after the close of trading on Thursday. Evergrande, which has a 14.1 percent stake in Vanke, said in a later statement it had no intention of buying more shares.

Vanke’s mainland-listed A shares jumped as much as 9.8 percent to a one-month high. The Hong Kong shares rose 5.9 percent to HK$19.70 ($2.54) at 10:05 am local time, the biggest increase since July 28.

The moves are the latest twists in a tug-of-war for control of Vanke, triggered more than a year ago when littleknown Baoneng Group emerged as its largest shareholder. Vanke last month terminated a 45.6 billion yuan restructuring plan that would have introduced Shenzhen Metro as its largest shareholder, to displace Baoneng, whose advances Vanke labeled as “hostile.”

The ownership tussle now

the gain in Vanke’s mainland-listed A shares on Friday

has “a large probability” to be resolved, given the Shenzhen government’s stronger influence on the major holders, Tu Lilei, a Shanghai-based property analyst at Haitong Securities Co, wrote in a Jan 12 note after the announcement. Baoneng and Shenzhen Metro are both based in Shenzhen.

The move is “a positive” for Vanke in reinforcing its Stateowned enterprise structure, JPMorgan Chase & Co Hong Kong-based property analyst Ryan Li wrote in a Jan 12 note