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Stock Markets
7 Oct 2021
Chinese Estates Shares Rise 30% after Privatization Offer
The Index Today
On Thursday, Chinese Estates Holdings Ltd shares soared as much as 31% after proposing to go private for a price tag of HK$1.91 billion. The company was a former major shareholder in Evergrande Group and comprises of multiple subsidiaries for developing real estate.
The company saw shares go up 30.69% to HK$3.79 by 12:37 AM ET. Solar Bright Ltd proposed the privatization offer, a renowned firm supported by Joseph Lau, Chinese Estates biggest shareholder. The proposal will a HK$4 per share to minority shareholders and a premium of 38% to the developer.
Chinese Estates has been known to be the second largest share owner of the Evergrande group which is struggling with debt. The company had a 6.48% stake which was sold down to 4.39% as of Thursday. Joseph Lau was appointed as the chairman of the company and is known to be a member of the elite poker club which hosts major tycoons including Evergrande’s chairman Hui Ka Yan.
The shares for Chinese Estates have been suspended for now after falling by 42%. The possibility of privatization could be a step towards minimizing costs for management resources and listing. It could also help in implementing new business strategies for the long-term.
