(Yicai Global) July 22 -- China Vanke Co., the subject of a headline-grabbing hostile takeover bid, and partners agreed to buy the commercial property firms of Blackstone Group LP and third parties for USD1.9 billion in a move likely aimed at countering predator Baoneng Investment Group Co. by enhancing Blackstone's position on its board.
Vanke [SHE:000002; HKG:2202], China's largest property developer, will contribute almost CNY3.89 billion (USD583 million), the Shenzhen-based company said in a stock exchange filing.
Vanke disclosed the Blackstone deal on July 12 after its second-biggest shareholder, China Resources Co., objected to a plan to issue 2.87 billion A-shares to white knight Shenzhen Metro Group Co., making the city's subway operator its majority shareholder and diluting existing equity stakes.
Blackstone has an independent director on Vanke's board who abstained from the vote on issuing new shares. Analysts believe Blackstone may use the funds to purchase shares of Vanke listed in Hong Kong.
The very public tussle for control of blue-chip Vanke has been one of the biggest corporate news stories in China. Vanke is trying to thwart a hostile takeover bid from Baoneng, an insurance and investment giant. Vanke Chairman Wang Shi has described Baoneng's share-buying spree as an act of "barbarians at the gates."
Vanke defines the Blackstone deal as an important action for its own strategic transformation, as the deal will help improve the company's capacity to manage commercial property. But the company has not revealed any details about the property firms held by Blackstone. Vanke also has not identified its partners.