Chinese Estates Shares Soar More Than 30pct as it Proposes Privatisation

08-Oct-2021 Intellasia | | 5:02 AM Print This Post

Chinese Estates Holdings Ltd (HK:0127) shares jumped as much as 31 percent on Thursday after the former major shareholder in China Evergrande Group (HK:3333) proposed to go private for a HK$1.91 billion ($245.30 million) price tag.

China Estates’ Hong Kong shares soared 30.69 percent to HK$3.79 by 12:37 AM ET (4:37 AM GMT).

The privatisation offer comes from Solar Bright Ltd, which is backed by the family of Chinese Estates’ biggest shareholder Joseph Lau. Chinese Estates’ proposal will offer minority shareholders HK$4 apiece, a 38 percent premium to the developer’s last traded price.

Chinese Estates was the second-largest shareholder in China Evergrande with a 6.48 percent stake, before selling it down since August 2021 to the 4.39 percent it holds as of Thursday. Lau, Chinese Estates’ former chair, is a member of a ‘poker club’ of Hong Kong tycoons that included China Evergrande chair Hui Ka Yan. China Evergrande, meanwhile, continues to deal with its debt woes.

Chinese Estate shares have been suspended from trading since Sep. 29 and were down 42 percent in 2021 before the suspension. A privatisation would reduce the costs and management resources needed for listing, and could provide more flexibility to carry out long-term business strategies.


Category: China

Print This Post

Comments are closed.