CHINA Vanke Co., the world’s largest residential property developer by sales, and its largest shareholder, a group backed by Baoneng Group, look set for a showdown after Vanke chairman Wang Shi said “see you Monday” in a posting on his Weibo account Saturday and Baoneng defended its reputation in an exchange filing.

    Vanke faces a hostile takeover bid by the Baoneng-backed group, Vanke president Yu Liang said Friday. Wang said the company doesn’t welcome Baoneng and its affiliates, which lack credibility and may have a negative impact on Vanke’s credit ratings and reputation.

    In a statement published on its website Friday, Baoneng said it is a Shenzhen-based 23-year-old property developer and financial services group that “legally operates its business, has created huge value for society and its customers, and has a good name in the market.”

    Vanke, which develops residential properties in Shenzhen, Shanghai, Beijing and other big Chinese cities, has a market capitalization of more than US$40 billion. Baoneng replaced China Resources Co. as Vanke’s largest shareholder this month, prompting the rare public spat.

    Vanke halted trading in its shares Friday and said it has plans to issue an undisclosed number of new shares, without releasing details. Analysts said the announcement signals that Vanke has effectively adopted a poison pill, an antitakeover defense that can make buying up more shares prohibitively expensive.

    Wang, an avid outdoorsman and environmentalist, is also a social media celebrity, with 22 million followers on the Weibo social media service. He removed the Weibo post hours after publishing it Saturday.

    “The healthy development of a listed company is inseparable from the support of its employees, customers, suppliers and communities,” he said in a later posting. “When making business decisions, a company not only must consider the interests of its shareholders, but also those of related stakeholders.” A hostile takeover “disregards the related interests of society,” he said.

    Such a high profile corporate takeover fight is rare in China. The country’s capital markets are only about 25 years old and still haven’t developed the sense of robust shareholder activism that can trigger dramatic corporate moves in other markets.

    “In countries abroad, hostile takeover bids and the subsequent poison pill measures are common but not in China,” said Alex Wang, Shanghai managing partner at Dentons, a global law firm. “Here, investors usually engage in negotiations with the management rather than wrest control through the market.”

    A spokesman for the China Securities Regulatory Commission said Friday it wouldn’t intervene in the Vanke share purchases “as long as they abide by related laws and rules.”

    Baoneng’s consortium, composed of two entities called Shenzhen Jushenghua Co. and Foresea Life Insurance Co., increased their stake in Vanke to 22.45 percent as of Dec. 11, from less than 5 percent, within five months.

    In a transcript of an internal meeting, Wang said that Baoneng has a poor track record of developing projects and of managing a logistics business. “How could I welcome such a shareholder?” he said, according to the transcript.

    Wang also criticized the financing behind the purchases, according to the transcript. In a stock exchange filing, Shenzhen Jushenghua said it financed its purchase of Vanke shares by selling wealth management products, which are common investment products in China, to investors. It said it would have to liquidate its Vanke holdings if the net asset value of its investment product fell below 0.8 yuan (US$0.12) per unit. (SD-Agencies)