HONG KONG (Reuters) - China Vanke (2202.HK), the residential property developer at the center of a high-profile power struggle, said smaller rival China Evergrande Group (3333.HK) has not responded to its queries about its intention in building up a stake in the firm.
“Evergrande is a relatively respectable peer of ours,” Wang Wenjin, executive vice president of Vanke, told an earnings press conference in Hong Kong on Monday. “We have been asking them about their intention in buying our shares but they have never replied.”
Evergrande has built up a near 7 percent interest in Vanke this month. Vanke’s management is already fending off a potential bid from its biggest investor, financial firm Baoneng Group, which has built up a 25 percent stake despite the developer’s protests.
The comments by the Vanke executive mean clues about how China’s most publicly fought corporate battle will turn out are still hard to come by. The companies involved in the tussle have hardly commented so far on their motives or strategies.
The saga, though is hurting Vanke, with the company saying on Sunday that some of its partners and customers have raised concerns about its prospects as a result of the battle.
Vanke company secretary Zhu Xu told the briefing on Monday that Evergrande was in touch with Vanke before it bought the shares.
“The power battle looks mysterious at the moment,” Zhu said.
Evergrande declined to comment.
Vanke president Yu Liang was absent from Monday’s briefing, for the first time in recent years. “He’s busy handling the company’s power battle,” Zhu said. Vanke chairman Wang Shi, who has skipped the briefings in the past few years, was also not present.
Fearing a hostile takeover bid by Baoneng, Vanke’s management announced in June an agreement on a $6.9 billion deal with white knight Shenzhen Metro Group. Both Baoneng and Vanke’s second-largest shareholder, China Resources, have said they would oppose the deal.
Zhu said on Monday Vanke will continue to negotiate with major shareholders to come up with new terms on the deal that will be beneficial to all.
Baoneng also proposed to oust Vanke’s board, which China Resources did not support.
Vanke reported a 10 percent rise in net profit in the first six months, falling short of analyst estimates due to lower-than-expected average selling price, dragged by booking of projects pre-sold during a market correction in 2014.
Reporting by Clare Jim; Additional reporting by Yimou Lee; Editing by Muralikumar Anantharaman