CHINA Evergrande Group said yesterday it has bought more shares in rival property developer China Vanke, the latest purchase in a rapid build-up this month that could soon see it become the company’s second biggest shareholder.

    Vanke is at the center of rare high-profile and complex corporate power struggle that has already seen its biggest shareholder, the Baoneng financial conglomerate, try to oust its board and Vanke management seek a white knight deal.

    While highly indebted Evergrande’s intention toward Shenzhen-based Vanke, the country’s biggest homebuilder, remains unclear, some analysts say it might seek seats on Vanke’s board at the latter’s next annual shareholder meeting in March.

    Evergrande said in a statement yesterday that it has now spent 36.3 billion yuan (US$5.3 billion) holding 14.07 percent of Vanke. That represents a sudden jump from just 10 percent a week ago and a holding of around 5 percent in August.

    By contrast, Baoneng holds 25.4 percent while Vanke’s second-biggest shareholder, China Resources Group, owns 15.24 percent.

    Analysts said yesterday that around 25 percent of Vanke shares remain as free float and expectations are high that Evergrande will continue to buy.

    “Even if Evergrande doesn’t take over Vanke in the end, it’ll get a good share of Vanke’s earnings as a minority shareholder. But if they do take it over, it’ll help Evergrande’s balance sheet a lot and lower its gearing,” said David Hong, head of research at CRIC Hong Kong.

    Evergrande’s statement follows disclosures by the Shenzhen Stock Exchange that block trades of China Vanke A shares, representing a 3.99 percent stake, were made Tuesday.

    The shares were traded at 27.5 yuan each, 5.1 percent higher than Tuesday’s closing price. Evergrande did not confirm it was the purchaser of the block trade. Vanke’s Shenzhen-listed shares closed up 3.13 percent at 26.98 yuan yesterday.

    Vanke’s management said in June a US$6.9 billion deal with white knight Shenzhen Metro Group, fearing a hostile takeover bid by Baoneng Group but it remains unclear if that deal will proceed. (SD-Agencies)