Shangai: China Vanke Co said shareholder dissent led it to scrap plans to issue new shares intended to fund the purchase of a stake in Shenzhen Metro Group Co.
Vanke terminated the plan to pay as much as 60bn yuan ($8.6bn) for the stake in the urban-rail transit company, Shenzhen-based Vanke said in a filing to the stock exchange yesterday. Major shareholders weren’t able to reach an agreement on the issue within the required time frame, according to the filing. Vanke promised not to plan major asset restructuring plans again over the next month.
The move from Vanke, China’s largest publicly-traded developer, comes amid a tug-of-war for control with Baoneng Group, its largest shareholder. Vanke’s management questioned the credibility of little-known Baoneng after it emerged as Vanke’s biggest owner, and labeled its approach a “hostile takeover.” Vanke said last December it was planning a share sale, prompting speculation the move was designed to dilute Baoneng’s ownership. “After the preliminary plan was announced, some of the company’s major shareholders publicly voiced dissent on the transaction,” Vanke said in the filing. “So far, involved parties have yet to reach consensus on the deal’s specific plan."
Baoneng replaced state-owned China Resources Co as Vanke’s largest shareholder in December last year, sparking a rare public spat that eventually drew closely held Anbang Insurance Group and rival China Evergrande Group into the fray.
