Property developer China Evergrande Group (3333.HK) said it has further raised its stake in larger rival China Vanke Co Ltd (000002.SZ) to 8.29 percent, the latest move in a spending spree by the company.
Evergrande, the second-biggest property developer by sales in China, purchased another 1.45 percent stake in Vanke (2202.HK) for 4.2 billion yuan ($620 million), it said in a filing to the Hong Kong stock exchange on Wednesday.
The company did not say why it was increasing its stake but some analysts have said it wants to increase its influence at Vanke and they had expected it to lift its holding after it bought shares in Vanke in August.
Evergrande’s purchase in August of $2.2 billion worth of Vanke shares put it at the heart of a corporate battle as Vanke was fending off a potential bid from financial firm Baoneng Group, its biggest shareholder.
Guangzhou-based Evergrande is heavily indebted but is ambitious. Its intentions towards Vanke are unclear but some analysts say it might seek seats on Vanke’s board at the latter’s next annual shareholder meeting in March to further increase its influence.
Evergrande has captured investor attention after amassing $57 billion in debt, almost six times its market value, on corporate mergers and land acquisitions.
In April, it bought a majority stake in Shenzhen-listed Calxon Group (000918.SZ), in a $553 million deal.
Evergrande also planned a backdoor listing in mainland China by injecting almost all of its property assets into a Shenzhen company, aiming to boost its valuation and make it easier to raise funds.
Vanke’s Shenzhen-listed shares surged 8.6 percent on reports of Evergrande’s stake boost. Shares in Guangzhou-based Evergrande closed 0.6 percent lower.
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Source: Reuters.com
