Dalian Wanda makes $4.4 billion offer to take Hong Kong-listed property arm private

Mon May 30, 2016 3:14am EDT
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By Clare Jim

HONG KONG (Reuters) - China's Dalian Wanda Group is offering $4.4 billion in cash to buy out Hong Kong-listed unit Dalian Wanda Commercial Properties 3699.HK, part of a plan to take it private before relisting it in Shanghai where it hopes to gain better valuations.

Mainland-listed firms typically command higher valuations than those in Hong Kong, helped by a large pool of retail investors. An index tracking dual-listed companies .HSCAHPI, shows mainland listings trade at an average 34 percent premium to the same company listed in Hong Kong.

The move comes just 15 months after Wanda Commercial's market debut. The group, led by tycoon Wang Jianlin, has set up a special purpose vehicle to buy all the Hong Kong-listed shares of the property unit.

Investors in the special purpose vehicle will receive up to 12 percent annual interest on their holdings if the property arm fails to relist in China within two years.

The HK$52.80 per share offer represents a 10 percent premium to Wanda Commercial's IPO price and values China's biggest commercial property developer at about $31 billion.

It is also a 44.5 percent premium to the unit's closing price on March 29.

But the stock, which only just resumed trade after a one-month suspension, lost 2.6 percent on Monday to stand at HK$48.70.

Dalian Wanda said in a statement that it would not increase the offer price.   Continued...

Wang Jianlin, Chairman of Dalian Wanda Group in China, speaks before a dialogue session during the Asian Financial Forum in Hong Kong, China, January 18, 2016. REUTERS/Bobby Yip