On Monday, Chinese building developer Soho China Ltd. shares plummeted by as much as 40 per cent in Hong Kong trading after the company failed to sell for 3 billion USD to global investment company BlackStone. This is the second failed attempt by the Beijing-based company to sell itself.
Both companies have reportedly concluded that the offer’s preconditions could not be satisfied before the agreed date, which would not be extended.
In March 2020, Soho was negotiating a potential deal with overseas financial investors to bring a bid for the company. New-York based Blackstone then offered Soho up to 23.7 billion HKD (3 billion USD) in June, pending regulatory approval. In August, China’s antitrust regulator formally accepted the deal for review, and Soho announced all previous talks with potential investors were terminated.
Founded in 1995, Soho’s recent lack of new pipeline assets and falling office rents in major Chinese cities has negatively impacted its profits, making it a takeover target since early 2020. Amidst the Chinese Communist Party (CCP) regulatory crackdown, China’s commercial property space faces increasing pressure and liquidity possibilities.
Since 2008, Blackstone has invested in Chinese office, retail and logistics assets. The global investor reportedly owns around 6 million square meters of properties in China and wants to invest further in the region. Elite billionaire George Soros has criticised the business for this endeavour, even calling on US Congress to take action against the move.
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