New | China Vanke considers issuing new shares amid battle for control of company
Mainland’s biggest home builder says it plans to acquire another company via a share and cash deal
China Vanke says it may issue new shares to acquire a company, a move that could dilute the value of shares held by existing shareholders as a high-profile battle for control of the company being waged.
China’s largest home builder, which is listed in both Shenzhen and Hong Kong, said in a filing to the Hong Kong stock exchange on Tuesday it intended to acquire a company via a share and cash deal which might include the issue of new A shares or H shares.
It said it had signed a letter of intent on December 25 and was actively pursuing the arrangement, although it did not identify the company involved.
Vanke said it was also discussing a potential tie up with other vendors.
“The ultimate consideration of the transaction, the structure of the transaction and the actual scope of the target assets will be determined in accordance with the results of due diligence and valuation, and will be decided by the company and the potential vendor through negotiation,” it said.
Market sources said Vanke chairman Wang Shi would issue new shares to a friendly party supportive of existing management to block Baoneng Group, which has become Vanke’s largest shareholder, from taking control of the company.