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SOHO China Shares Crumble After Blackstone Walks Away From Buyout

Shares of the office developer saw their biggest daily fall since 2007 with speculation rife that the US equity firm scrapped the deal over fears China’s regulator would reject the move

Zaha Hadid’s work Galaxy SOHO was the best-selling project across China in 2010. Image: Reuters.

 

Shares of Chinese office developer SOHO China crashed by 40% on Monday – their biggest daily drop since listing more than 14 years ago – after Blackstone scrapped what would have been China’s largest real estate buyout.    

The stock fell to as low as HK$2.10, the lowest since November 2020, in its worst day since listing in 2007.

SOHO China said Blackstone, which had offered HK$5 per share in June to buy all shares in the company, had abandoned the $3 billion deal on Friday as pre-conditions were unable to be satisfied.

 

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The company had said in June the deal was subject to Chinese competition authorities granting clearance.    

Two sources with knowledge of the deal said the State Administration for Market Regulation did not want the takeover to go through, with one of them adding the regulator “just went silent.”

The source said they believed President Xi Jinping’s common prosperity campaign, which seeks to narrow a yawning wealth gap, may have played a part in the regulator’s refusal amid concerns over the SOHO owners’ plans to invest the proceeds overseas.

SOHO China is 64% owned by the husband-and-wife founding team of Chairman Pan Shiyi and Chief Executive Zhang Xin, who have been scouting for buyers for its prime commercial property assets as they look to shift their focus to overseas markets. 

The Hang Seng Composite Index tracking properties and construction stocks and the benchmark index both dropped 1.6%.

 

  • Reuters and Sean O’Meara

 

Read more:

US Equity Firm Blackstone Axes $3bn Soho China Takeover Plan

SOHO China soars 21% after Blackstone’s $3bn purchase offer

 

Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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