(Yicai Global) Dec. 19 -- Wang Shi, founder and board chairman of China Vanke Co. [SHE: 000002] said that the company's equity dispute is not yet at an end.
Wang said this at the first National Development Forum, held on Dec. 18 in Beijing. However, he did not elaborate the issue, chinanews.com reported.
The protracted struggle for control of China's second-biggest property developer, China Vanke Co. [SHE:000002], looks set to conclude soon.
A CNY40 billion (USD5.75 billion) to CNY60 billion reorganization deal arranged with white knight Shenzhen Metro Group Co. will be cancelled due to disagreement among its major shareholders, the Shenzhen-based company said yesterday. The deal was designed to scupper Baoneng Group's hostile takeover bid, so the decision to cancel it may be a sign that the struggle is over, an analyst said.
The battle for control of the blue-chip company has been one of China's biggest corporate news stories since last year. Baoneng Group, controlled by Chinese businessman Yao Zhenhua, recently became Vanke's top shareholder through several aggressive share buys on the secondary market through one of its subsidiaries. The move met with strong resistance from Vanke founder Wang Shi and its management. Vanke signed an asset reorganization agreement with Shenzhen Metro, hoping to resist a takeover through corporate equity restructuring.
Vanke held several rounds of talks with the shareholders about the importance of the deal and proposed changes to the plan, but no consensus was reached. The company decided to terminate the proposed deal with Shenzhen Metro, and has signed a termination agreement with the transit company.
Vanke's board passed the restructuring plan on June 17. However, China Resources Holding Co., the company's third-largest shareholder, objected to the deal and publicly questioned the legitimacy of the board meeting. Several small shareholders even lodged suits against Vanke.
As regulators tighten up control on insurance companies investing in stock markets, Baoneng's Yao is looking at a loss on the Vanke's shares he bought through his insurance subsidiary, and faces tough restrictions in the future.