Billionaire Wang Jianlin is facing hurdles in his buyout bid for Dalian Wanda Commercial Properties Co. Ltd. (03699.HK), with a major Dutch fund saying the offer is too low.
“We have concerns about the privatization plan” because the offer isn’t attractive, Yoo-Kyung Park, a director in charge of corporate governance at APG Groep NV’s asset-management arm, told Bloomberg in an interview in Hong Kong.
APG hasn’t made a decision on which way it will vote on the US$4.4 billion transaction, she said.
Still, APG would make a profit from the deal, which could be the biggest privatization Hong Kong has ever seen, if it sold out, because it bought into the stock during its 2014 initial public offering.
By contrast, BlackRock Inc. built up most of its holdings in Wanda Commercial in the second quarter of last year, when the stock peaked at HK$78, and stands to lose about HK$235 million (US$30 million) if Wang’s HK$52.80-a-share offer goes through, Bloomberg data shows.
In its filing last month, Wanda Commercial said it won’t raise the offer price. Shares tumbled 6.1 percent, the most in 10 months, and closed at HK$46.10 on Wednesday.
APG and BlackRock, which together own a combined stake of almost 12 percent, are key to the outcome of the proposal, because the deal would collapse if even 10 percent of shareholders reject the offer.
That would be a blow to Wang, Asia’s second-richest man, who’s seeking to relocate Wanda Commercial’s listing to mainland China, where it could enjoy higher valuations.
BlackRock, the third-largest investor in Wanda Commercial’s Hong Kong shares, declined to comment on its potential losses and how it will vote.
The world’s largest asset manager held 44 million Wanda Commercial shares, or a 6.8 percent stake, last month. APG ranks sixth, with almost 5 percent.
Wang and his flagship Dalian Wanda Group Co. control the property developer through majority holdings in the company’s unlisted shares in mainland China.
The shares in Hong Kong are listed but account for only 14 percent of the outstanding stock. Of the listed shares, about half are owned by 11 minority shareholders, who mostly bought in when the company had its IPO.
– Contact us at [email protected]