US private equity firm Blackstone is said to be in exclusive talks to take prime office developer SOHO China private in a $4bn (£3bn, €3.5bn) deal. This makes it one of the biggest bets yet on the Chinese market.
Blackstone entered exclusive discussions in early February with Hong Kong-listed SOHO China, with the US firm offering HK$6 ($0.77) per share to take the company private.
This represents an almost 100 per cent premium to the HK$3.03 average price of SOHO China’s shares in January.
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On March 9 the shares closed at HK$2.98.
Further details of privatising SOHO China, which was founded in 1995, are said to be expected to be finalised in the coming weeks.
Blackstone would also take over the debt of SOHO China which stood at 32.68bn yuan ($4.70bn) at the end of June 2019.
In September, Blackstone raised $20.5bn in the world’s largest-ever real estate fund. In 2018, it raised $7.1bn for its biggest-ever property fund in Asia.
SOHO China’s investment properties were valued at $8.78bn at the end of June last year, according to its 2019 interim report.
The developer started to sell prime commercial property assets last year as its founders looked to shift their focus to overseas markets. Among the sales were eight office projects in Beijing and Shanghai.
SOHO China posted a net profit of 565m yuan in the first six months of 2019, down 48 per cent from the same period a year earlier.
Blackstone’s China real estate investments include $1.25bn paid for Mapletree Business City Shanghai and VivoCity Shanghai.
Neither Blackstone nor SOHO China have made any comments on the matter.