Shares of Soho China fell 40% after the collapse of the Blackstone deal
Shares in Soho China fell 40 percent on Monday after US private equity group Blackstone lifted a माल 3 billion stake in a Chinese real estate company last week.
Soho wiped out about 30 830 million from China’s market value as its Hong Kong-listed shares fell when the exchange opened for trading. The companies said in a joint statement on Friday that they would not be able to obtain a no-confidence motion to take possession within the accepted deadline.
Blackstone’s HK $ 5-a-share offer, made in June, which valued the property developer at HK $ 26bn (US $ 3.3bn) but subject to Beijing’s approval. As of late Monday morning in Hong Kong, shares of Soho China were trading at HK $ 2.28, the level before announcing planned purchases.
The failure of the acquisition came against the backdrop of extensive policy reshuffles and regulatory bans in China, where officials have stepped up scrutiny of foreign investment and taken actions that are perceived as monopoly business practices.
As a result, Wall Street is experiencing widespread divisions in terms of investment in China, as the snowballing regulatory review is undermining the confidence of investors in the world’s second-largest economy.
The failed deal has also returned the spotlight to Soho China founders Pan Xiai and Zhang Xin. The colorful couple is synonymous with the development of the Beijing and Shanghai skylines and has been the subject of intense discussion in the Chinese state and social media since the deal was announced.
“Do you want to run away with your money? You don’t want to stay here and lead us to common prosperity? Asked by media personality Zhang Yixuan, China’s microblogging platform like Twitter is writing on Weibo.
The couple has been criticized by Chinese media and internet users, who have recently spent more time abroad, after a large donation to Harvard University and real estate purchases in the US made headlines.
Following the end of the Blackstone deal, images of Pan and Zhang participating in the US Open tennis tournament in New York over the weekend spread rapidly on social media.
“So they’re already gone,” said one social media user.
“They transferred their property a long time ago,” another claimed.
For Blackstone, the failed acquisition of Soho’s portfolio of prime real estate in China’s largest cities dealt a major blow to co-founder Stephen Schwarzman’s plans to expand his group’s position in the country.