China Vanke, 2202 HK, admitted that fellow developer China Evergrande Group, 3333 HK, bought a large number of A shares, vaulting it ahead of the last count of Anbang Insurance shares. The ownership is complicated, with Vanke providing ownership details today.
This adds some interest to the takeover battle with Baoneng, currently with a majority interest in China Vanke. Baoneng surpassed China Resources’ ownership via multiple additions in 2016. Investment vehicles included asset management plans which have been targeted by Vanke Chairman Wang Shi, 65, as having an unhealthy impact on the Chinese economy. Once again, the investment vehicles in A shares are complicated.
Source: Annual Report
The other significant owners are China Resources, Anbang Insurance and Guosen Securities through an investment linked to an asset management plan linked to Industrial and Commercial Bank of China – per the last annual report of China Vanke.
The only shareholder with Board seats in this group is China Resources, with 3 votes out of the 11 total. The other shares are owned by the directors and one by a Blackstone affiliate which has an independent director on the Board. Baoneng has attempted to get seats through a board coup but has so far been defeated.
Evergrande has stated the buy was purely an investment in one of the largest developers in China with strong results. Evergrande has been criticized by Moody’s for this and other investments due to its high leverage. The battle shall continue between Vanke’s Wang Shi, 65, with only a .069% interest in the company he founded and 46 year old Baoneng founder Yao Zhenhua and now 56 year old Hui Ka-yan, who owns over 73% of Evergrande. As a major competitor of China Vanke, it’s doubtful that Evergrande will support the embattled Vanke chairman. Evergrande’s multiple, influential bankers will be watching.
For earlier reports on this conflict, read here.
Source, Annual Report