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Ping An unit takes USD 2bn stake in CFLD
Posted on Tuesday, 10 July 2018 10:11
Ping An Asset Management has just unveiled a deal that Zephyr, the M&A database published by Bureau van Dijk, shows is one of the largest mergers and acquisitions (M&A) targeting a global real estate developer announced so far this calendar year.

The unit of the insurance giant will become the second-largest shareholder of China Fortune Land (CFLD) through the purchase of a 19.7 per cent stake for CNY 13.80 billion (USD 2.08 billion),

At CNY 23.65 apiece, the sale of the 582.14 million stocks by the controlling owner represents a 4.9 per cent discount to the listed industrial hub-focused property developer and operator’s last unaffected closing price of CNY 24.90.

News of the agreement pushed shares to an intra-day high of CNY 27.39 before gains were pared to CNY 27.31, and a market capitalisation of CNY 79.37 billion, by the time the bell rang.

On one hand, Ping An Asset Management is increasing its CFLD stake to 19.8 per cent through the arrangement, while China Fortune Land Development Holding is trimming its holding to 41.9 per cent from 61.6 per cent.

The aim of the investment is to strengthen cooperation between the two companies and to improve the developer’s corporate governance, competitiveness and profitability, as well as promoting its growth.

CFLD booked revenue of CNY 9.49 billion in the first three months of 2018 (Q1 2017: CNY 7.81 billion) and profit of CNY 2.29 billion (Q1 2017: CNY 1.75 billion).

Zephyr,shows the stock sale is the sector’s sixth-largest M&A deal of the year to date.

Currently, the top three deals are: the acquisition of Anida Grupo by Promontoria Marina for USD 4.91 billion; the takeover of Zhongtian Urban for USD 3.88 billion; and a capital increase by Joy City Property worth CNY 2.35 billion.

© Zephus Ltd