Liu Minxia

    mllmx@msn.com

    THE Shenzhen-based China Vanke Co. Ltd. said last night that it will buy up to 60 billion yuan (US$9.5 billion) in assets from Shenzhen Metro by issuing new shares and using cash. The Baoneng Group is Vanke’s largest shareholder and is currently battling to take over Vanke. It’s believed the Metro move would dilute Baoneng’s hold on Vanke.

    The country’s largest listed property developer by value signed a preliminary cooperation memo Saturday with Shenzhen Metro, which is solely owned by the city government, to buy a company under the Metro developer mainly by issuing new shares to Shenzhen Metro, according to an exchange filing by China Vanke. The Shenzhen Metro will include some of its high-value properties built above Metro stations in the company Vanke buys. The transaction will be worth between 40 billion yuan and 60 billion yuan.

    Once the deal is completed, Shenzhen Metro, along with Vanke’s second-largest developer, China Resources, and Vanke’s management, will hold an estimated 40 percent of the developer’s shares.

    A rare corporate takeover fight broke out when Shenzhen-based Baoneng, now holding 24.26 percent of Vanke, became Vanke’s biggest investor in December, a move that the developer’s management labeled a “hostile takeover.” The Anbang Insurance Group Co. raised its holding in Vanke’s Shenzhen-listed shares later in December to more than 7 percent to become the developer’s third-largest shareholder before Vanke’s A shares were suspended. Vanke said it welcomed Beijing-based Anbang as an investor, although it’s unknown which side Anbang supports.

    “We are very happy to find that Shenzhen Metro shares the same ideas and goals as Vanke,” Wang Shi, chairman of Vanke, said after the signing ceremony Saturday. “They put faith in our cooperation by offering the best assets they own in Shenzhen and I believe we’ll create a better value for our shareholders.”

    Shenzhen Metro, with total assets reaching 241 billion yuan, currently has 10 property projects on top of metro stations in Shenzhen’s central areas like Qianhai, Futian and Longhua.

    Vanke posted a 15-percent increase in yearly profit last night, saying its 2015 net income rose to 18.1 billion yuan, or 1.64 yuan a share, from 15.7 billion yuan, or 1.43 yuan a share, a year earlier.

    Sales in the 14 cities where the company derives most of its revenue, including Beijing and Shanghai, “rebounded significantly” last year after the government eased property curbs to prop up demand for homes, it said in the filing.

    Vanke’s shares remain frozen in Shenzhen since the deal is not finalized.