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Blackstone drops US$3.05 billion offer for Soho China amid regulatory review of takeover of the largest developer in Beijing
- US private equity giant offered HK$5 per share for Soho, valuing the Hong Kong-listed developer at HK$26 billion (US$3.34 billion)
- The parties cited lack of progress in meeting the deal conditions by its December deadline
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US private equity giant Blackstone Group has abandoned its US$3.05 billion offer to buy developer Soho China, halting its expansion plans in the mainland Chinese market through one of its biggest real estate acquisitions in Asia.
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The firm decided not to proceed with its HK$5 per share offer for the developer, citing the lack of progress in fulfilling the conditions by the targeted completion date of December 31, according to an exchange filing on Friday. That offer in June valued the entire listed firm at HK$26 billion (US$3.34 billion).
All parties in the deal agreed not to extend the deadline, the statement added.
The cancellation came after China’s antitrust regulator, State Administration for Market Regulation (SAMR), last month started reviewing the transaction. Friday’s announcement did not say if it was related to the regulatory scrutiny. However, the review by the antitrust watchdog was one of the prerequisites that had to be satisfied for the deal to go through when the proposed sale was announced in June.
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The antitrust review of the Soho deal came in the midst of fraying ties between China and the United States. Since US President Joe Biden took office in January, his administration warned US businesses about the risks of investing in China because of Beijing’s tightening grip over Hong Kong, and its escalating crackdown on industries ranging from e-commerce and real estate to private tutoring firms, sectors deemed as having too much sway over China’s economy.
Blackstone, which manages about US$196 billion of assets globally, had won commitments from Soho chairman Pan Shiyi and chief executive officer Zhang Xin for 54.9 per cent stake in the firm, which the husband-and-wife team built from 1995 into a major mixed-use residential and commercial property developer.
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