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

Blackstone’s offer in June had valued the property group – which holds prime real estate in cities like Beijing – at HK$26 billion but worries over ‘time frames’ have scuppered the deal

China's real estate sector has been hit in recent weeks, with Beijing's crackdowns making it harder to raise cash.

 

A US private equity firm has scrapped a planned $3 billion purchase of Chinese property developer Soho China, over fears antitrust authorities would refuse to rubber-stamp the deal.

Blackstone had hoped to expand its presence in the country through its acquisition of Soho China, which holds prime real estate in cities like Beijing.

But its offer had been conditional upon clearance from China’s competition authorities, and the parties concluded that the pre-conditions would not be satisfied within a designated time frame, according to a filing to the Hong Kong exchange dated Friday.

Both sides have now “agreed that the offer should not be made,” the filing added.

 

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Blackstone’s offer in June, at HK$5 per share, was over 30% above Soho China’s closing price at the time – and valued the property group at HK$26 billion ($3.3 billion).

A June filing said Blackstone owned “approximately 6 million square meters of properties in China”.

The move comes as Beijing steps up its broad crackdown on monopolistic behaviour and deals that has spooked China’s once unassailable tech giants, with regulators taking aim at industries from e-commerce to education.

The real estate sector has also been hit in recent weeks, with a crackdown making it harder to raise cash and embattled firms like real estate giant Evergrande struggling to service debts.

 

  • AFP and Sean O’Meara

 

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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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