HONG KONG, May 28 (Reuters) - Chinese developer Sunac China Holdings Ltd said it had terminated its offer to take over indebted rival Kaisa Group Holdings Ltd and Kaisa would refund prepayments totalling HK$2.33 billion ($299.8 million).
The announcement nullifies Sunac’s bid in February to buy a 49.25 percent stake in Kaisa for $587 million, a deal that offered a lifeline to a developer that was about to become the first Chinese firm to default on an offshore bond.
Kaisa had been hit by a government blockage on sales at some of its developments and the subsequent departure of a string of senior executives including founding chairman Kwok Ying Shing.
But last month, Kaisa reinstated Kwok and fired three staff members appointed from Sunac, fuelling speculation Kwok had found a way to offer bondholders better terms than its rival.
Sunac said in a statement to the stock exchange on Thursday that “certain conditions precedent have not been fulfilled” and the parties had agreed to terminate the deal.
Sunac’s shares will resume trading on Thursday. The shares closed at HK$9.759 before being suspended on May 15. ($1 = 7.7563 Hong Kong dollars) (Reporting by Clare Jim; Editing by Stephen Coates)