China's Evergrande buys $1.37bn stake

China's Evergrande Real Estate has bought a stake worth more than $1 billion in the nation's biggest property company Vanke -- the latest development in an ongoing tussle over control of the firm.

Bosses of Vanke, China's largest residential developer by sales, have for months been trying to stave off what would be the country's first hostile blue-chip takeover, after a private conglomerate purchased a more than 20 percent stake.

Evergrande announced it had paid 9.11 billion yuan ($1.37 billion) for 4.68 percent of Vanke shares in a statement filed to the Hong Kong stock exchange Thursday.

"Vanke is one of the largest property developers in China with strong results. The acquisition is an investment of the group," it said.

Vanke confirmed the deal Friday in a statement to the Shenzhen exchange, where its shares traded up 6.5 percent by the close.

Share prices on the Hong Kong exchange were also boosted 1.6 percent by the end of play.

It is not yet clear where Evergrande fit in to the tussle for Vanke, which has been triggered by private conglomerate Baoneng.

With an eye on its valuable land bank, Baoneng began buying shares in Vanke last year, becoming its largest shareholder in December with a 24.26 per cent stake.

In December, Vanke's founder, 65-year-old Wang Shi, asked for its dual-listed shares to be suspended in Shenzhen and Hong Kong, blocking Baoneng from any further purchases.

It announced in June a 45.6 billion yuan asset swap and restructuring that would see state-owned subway operator Shenzhen Metro Group overtake Baoneng as its biggest shareholder.

Trading in its Shenzhen shares resumed in July and immediately plunged by the 10 percent daily limit.

China's market regulator condemned the management team and major shareholders of Vanke, saying it has "intensified conflicts" and "disregarded the stability of the capital market".

Hong Kong's rules on share suspensions are stricter than the mainland, and trading in Vanke resumed after two weeks.

Source: AFP