Battle for Vanke Heats Up

Reuters: Vanke says business under pressure after Baoneng move to oust board
A plan by China Vanke's largest shareholder bloc to oust the property developer's board has led banks to reconsider how they rate the company's credit, Vanke President Yu Liang told a shareholders' meeting on Monday.

Financial conglomerate Baoneng, which built up a big stake in Vanke last year, is now seeking to oust founder and chairman, Wang Shi and the rest of the board, and has called for an extraordinary general meeting, Vanke said in a statement late on Sunday.
WSJ: Heat Rises on China Vanke
Earlier this month, Vanke said it would issue new shares in an asset-swap deal that would make subway operator Shenzhen Metro Group its largest shareholder. Shenzhen is a metropolis in southern China.

The deal, which will be dilutive, will give Shenzhen Metro a 20.65% stake of the enlarged share capital and will displace Baoneng as Vanke’s largest shareholder. In exchange for the issued shares, Vanke would get land atop metro stations.

Baoneng, according to the exchange filing, is seeking to undermine Vanke’s strategy, which is widely seen as a poison pill. Companies threatened with unwelcome takeover offers often use tactics to make themselves unattractive to bidders.

Baoneng became Vanke’s top shareholder after buying a 24.29% stake through its subsidiaries, bypassing the previous incumbent, China Resources Group. China Resources also opposes the Shenzhen Metro asset-swap deal.
FT: China Vanke boardroom feud boils over
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Both the insult and the prospect of an unprecedented battle for control over one of China’s best-known companies captivated the country’s media. Adding to the drama was Mr Wang’s reputation as one of the country’s most admired and colourful entrepreneurs.

Mr Wang, also a mountaineer and adventurer, built Vanke into a successful developer but never sought to consolidate control over the company, trusting its largest shareholders to not interfere in management.
Trading in Vanke’s Shenzhen-listed shares has been suspended since December 18 pending a restructuring. Both Vanke and Baoneng are based in Shenzhen, the special economic zone bordering Hong Kong.
Shares are still trading in Hong Kong and have formed a head-and-shoulders pattern. If it completes, the downside target is HK$9 and change, a 42 percent decline.

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