Blackstone Group is to acquire developer Soho China (0410) for nearly HK$24 billion, according to an exchange filing.
It will purchase a 54.93 percent stake at HK$5 a share for around HK$23.66 billion.
The average price is 31.6 percent higher than the closing price before trading halted and the deal is expected to be completed by the year's end. Trading in Soho China, which halted Tuesday, will resume today.
Soho China is owned by the husband-wife team of chairman Pan Shiyi and chief executive Zhang Xin. Their stake in the office developer will fall from 31.97 percent each to 9 percent combined upon the completion of the deal.
They will remain the second-largest shareholder of the group and will continue leveraging their resources to advise and enhance the group's business, the filing said.
The filing also said that Blackstone has been an active investor in Chinese properties in the past decade, and currently owns nearly 6 million square meters of properties in China.
"Confident about China's long-term economic prospects and the Beijing and Shanghai office market, Blackstone seeks to expand in China through its investment in Soho China," the filing said
Soho China's stock price surged 48 percent last week, the most since the company went public in 2007.
Soho has been seen as a takeover target since early 2020, as a lack of new assets in its pipeline and declining office rents in key Chinese cities put mounting pressure on its profits. The Beijing-based developer said in March last year it was in talks on a potential deal with overseas financial investors that could lead to a bid for the company.
Blackstone was earlier in discussions about a deal for Soho, though negotiations stalled due to concerns about financing and the impact of the coronavirus pandemic, Bloomberg News reported at the time.
Soho said in August that all previous talks with potential investors had been terminated.
Soho has developed 54 million square feet of commercial projects in Beijing and Shanghai, according to its website. Its key assets include the signature Bund Soho in Shanghai and the landmark Wangjing Soho in Beijing, designed by Zaha Hadid, the first woman to receive the prestigious Pritzker Architecture Prize.
Blackstone's real estate arm has about US$196 billion of capital under management, according to its website. The investment firm reached a US$1.1 billion deal in November to buy control of the biggest urban logistics park in southern China's Greater Bay Area.
REUTERS
