Soho China, builder of Zaha Hadid’s curves, is in talks with Blackstone in US$4 billion privatisation deal

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The developer, founded in 1995 by a husband-and-wife team, is in exclusive talks with Blackstone in a US$4 billion deal, Reuters reported, citing people with direct knowledge of the matter

The US private equity group will pay HK$6 per share, almost double Soho China’s average price of HK$3.03 in January, to take the company private, according to the report

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Galaxy Soho, designed by the late Iraqi-British architect Zaha Hadid, in Beijing on 29 April 2014. Photo: Handout by Zaha Hadid Architects

Pearl LiuandChad Bray

Published: 7:30pm, 10 Mar 2020Updated: 10:29pm, 10 Mar 2020

Soho China Limited, whose curvilinear office buildings gave Beijing’s chessboard cityscape its futuristic skyline, is being taken private in one of the country’s largest privatisation deals.

The developer, founded in 1995 by a husband-and-wife team, is in exclusive talks with Blackstone in a US$4 billion deal, Reuters reported, citing people with direct knowledge of the matter. The US private equity group will pay HK$6 per share, almost double Soho China’s average price of HK$3.03 in January, to take the company private, according to the report.

“The potential privatisation by Blackstone may come as a positive surprise to shareholders who have anticipated its asset disposal, as the potential privatisation offer price implies 0.8 times of price-to-book ratio in 2019,” said CGS-CIMB Securities’ property analyst Raymond Cheng, adding that the deal suggests Soho China’s assets would be better valued in private hands.

The deal marks a formal exit from the equity market for Soho China’s Chairman Pan Shiyi and Chief Executive Officer Zhang Xin, who together built the company into one of the country’s major developers of mixed-used residential and commercial property. Soho China had been trying to sell its assets since last year, offering eight office towers in Beijing and Shanghai for as much as US$8 billion, according to a Bloomberg report.

Soho China’s Chairman Pan Shiyi (left) and Chief Executive Officer Zhang Xin (right) during an award ceremony sponsored by Montblanc in Beijing on 18 May 2004. Photo: Post Magazine

The developer, who commissioned the late Iraqi-British architect Zaha Hadid to design several of its office buildings in Beijing and Shanghai, put 20,000 square metres (215,278 square feet) of space on the market for 7.8 billion yuan (US$1.12 billion) last June.