Blackstone to buy out office developer SOHO China in US$3 billion deal

Reuters

Blackstone Group Inc will take control of SOHO China in a HK$23.7 billion (US$3.05 billion) deal and maintain its stock market listing, the Chinese office developer said in a filing on Wednesday, while the founders will retain a 9 percent stake.

The US private equity firm will offer HK$5 per share, 31.6 percent higher than the last closing price of HK$3.8 on Friday, in what would be its largest real estate deal in China. SOHO China's shares jumped as much as 25.8 percent to HK$4.78 early yesterday, as they resumed trading after being suspended since Tuesday.

Blackstone, which currently owns around 6 million square meters of properties in China, is seeking to expand as it is confident about the country's long-term economic prospects and the Beijing and Shanghai office market, the filing said.

SOHO China, a major developer well known for its futuristic office buildings on the mainland, has 1.3 million square meters of commercial properties in the country.

The company is 64 percent owned by the husband-and-wife founding team of Chairman Pan Shiyi and Chief Executive Zhang Xin. After the deal, they will become its second-largest shareholder with a 9 percent interest.

The offer is conditional on Chinese competition authorities granting clearance.

Founded in 1995, SOHO China went public in Hong Kong in 2007. Its shares have gained 62 percent in the past month and it had a market value of US$2.55 billion at the stock's last close, according to Refinitiv data.

The company has been scouting for buyers for its prime commercial property assets as the founders looked to shift their focus to overseas markets.