Shareholders have approved Dalian Wanda Commercial Properties’ planned go-private deal to de-list from the Hong Kong Stock Exchange, paving the way for Dalian Wanda Group’s property unit to seek a domestic listing at a higher valuation, according to an announcement.
The privatization deal, if completed, could be the largest such transaction this year. In May, Dalian Wanda Group proposed to buy out the unit’s owners at HK$52.80 per share, putting the total capital needed at around HK$34.45 billion.
Wang Jianlin, chairman of Dalian Wanda Group and Asia’s richest man, has been dissatisfied with how the property unit was valued since it was listed in Hong Kong in December 2014.
The company has been trading round its net asset value of RMB39.8 per share, according to its 2015 annual report. Wang has called the valuation "intolerable".
The company plans to submit an application for initial public offerings in China’s A-shares market after the stock is de-listed in Hong Kong, which is expected to take place on September 20, potentially becoming one of the fastest go-private deal to get completed.
Before the shareholder vote today, several major shareholders have agreed to the terms of the transaction, including China Life Insurance and Kuwait Investment Authority, each holding 7.42% of the company.
According to disclosure filings, Dalian Wanda Commercial Properties plans to issue no more than 250 million new shares to raise RMB12 billion in a new domestic listing at around RMB48 per share.
This would put its price-to-book ratio at 1.2, compared to 2.6, 1.4 and 2.1 for other major Chinese property developers Vanke, Poly Property Group and Greenland Holding Group, respectively, says the announcement.
Dalian Wanda Commercial Properties raised US$3.72 billion in the largest IPO in real estate globally at that time.