Evergrande Backer’s Privatization Collapses as Investors Revolt

(Bloomberg) -- Chinese Estates Holdings Ltd. minority shareholders failed to give sufficient support to the company’s proposed privatization, derailing a plan by the long-time ally of China Evergrande Group to delist next month. 

Among the 74 stockholders participating, 64 voted no and made up 10.8% of the shares among the investors, according to a stock exchange filing Friday. The Hong Kong real estate firm, owned by the family of billionaire Joseph Lau, announced plans in October to buy out investors at HK$4 a share. The stock last traded at HK$3.78 before being halted Friday afternoon ahead of the results. Chinese Estates has requested a trading resumption as of Monday and said its listing will be maintained.

Solar Bright, a British Virgin Islands company ultimately owned by Lau’s wife Chan Hoi-wan, had offered to take Chinese Estates private. The Lau family and related parties, which hold more than 78% of the company, didn’t cast votes.

The offer price was 83% above the last closing price of HK$2.18 before the privatization proposal was made public, but a 55% discount to the adjusted per-share net asset value, according to a filing last month. The stock was expected to leave the bourse on Jan. 24 had the buyout been accepted.

As members of the so-called Poker Club for property tycoons, Lau and Hui have a long history of business connections. Chinese Estates was a major shareholder of Evergrande before paring its stake beginning in August, and it has said it might sell all its shares in the debt-laden developer.

The Lau clan has a net worth estimated at $6.7 billion, down 12% this year, according to the Bloomberg Billionaires Index.

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