Pan Shiyi, chairman of SOHO China, sold 54.93% of SOHO China (00410.HK) to the Blackstone Group for HK$23.656 billion.
On the evening of June 16, SOHO China announced that Goldman Sachs, on behalf of the Blackstone Group, will acquire a total of approximately 2.856 billion shares of SOHO China at a price of HK$5 per share. The transaction price is approximately 23.656 billion Hong Kong dollars. The purchase price per share represents a premium of approximately 31.6% to the closing price of HK$3.8 per share on the last trading day. The company’s shares will officially resume trading at 9 a.m. on June 17.
After the completion of the transaction, SOHO China’s existing controlling shareholders will retain 9% of the shares, and SOHO China will continue to be listed on the Hong Kong Stock Exchange.
SOHO China stated in the announcement that Blackstone Group plans to maintain SOHO China’s existing main business and management, and plans to use the company’s resources in appropriate circumstances China expands. After the offer is completed, the Blackstone Group plans to conduct a detailed strategic review of the company to formulate the company’s business plans and strategies for future business development, and determine appropriate or desirable measures to optimize and rationalize the company’s business activities and asset portfolio.
So far, SOHO China’s buyer candidates have finally been announced.
In fact, SOHO China had previously negotiated with the Blackstone Group on the privatization of the company. At that time, the reported price was US$4 billion, but the transaction was finally terminated. .
On March 11, 2020, SOHO China announced that the company is negotiating with overseas financial investors to explore the possibility of strategic cooperation, which may or may not It will result in a general offer for all the issued shares of the company. Up to now, no decision has been made on whether to conduct a potential transaction, and no formal agreement has been entered into to implement the potential transaction with any party. In any case, the company cannot be sure that any such negotiations will result in a general offer for shares.
In May 2020, Bloomberg quoted people familiar with the matter as saying that due to the impact of the new crown pneumonia epidemic, the company’s prospects are full of uncertainty. The Blackstone Group negotiated on the privatization of SOHO China Stuck in a state of stagnation.
After the termination of the transaction with the Blackstone Group, there was news in November 2020 that SOHO China and the private equity firm Hillhouse conductedInitial negotiations, Hillhouse Capital intends to privatize it, this transaction may exceed 2 billion US dollars. But then Hillhouse Capital quickly clarified that it has no intention of privatizing SOHO China.
To this, Pan Shiyi also responded, “Last year (2020), I was busy issuing announcements to refute rumors. Many announcements were made in the middle of the night. As a listed company Let’s look at the announcement. This is the most accurate news.”
SOHO China’s 2020 annual report data shows that the company’s operating income in 2020 is about 2.192 billion yuan, a year-on-year increase. About 19%. Among them, rental income was 1.537 billion yuan, down 16% year-on-year, and property sales income was 654 million yuan. Pre-tax profit was about 1.6 billion yuan, a year-on-year decrease of about 17%; gross profit was 1.39 billion yuan, a year-on-year decrease of 7.9%; net profit was 543 million yuan, a year-on-year decrease of 58.8%; net debt ratio was about 43%, and average borrowing cost was about 4.7% , Total assets are about 70.704 billion yuan, and total liabilities are about 33.157 billion yuan.
In fact, since 2014, SOHO China has begun to sell assets in China, and at the same time, it has not purchased new assets in China. According to public statistics, SOHO China has cashed out about 29.341 billion yuan (RMB) from the sale of assets in the past five years.