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Soho China Shares Dive up to 40% as Blackrock Takeover Fails

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By Gina Lee

Investing.com – Soho China Ltd.'s (HK:0410) Hong Kong shares plummeted after a $3 billion takeover bid by Blackstone Group Inc. (NYSE:BX) ended in failure.

Shares plummeted 34.86% to HK$2.28 ($0.29) by 1:02 AM ET (5:02 AM GMT) on Monday, after falling up to 40% earlier in the session.

Blackstone’s decision against moving ahead with the acquisition was Soho’s second failed attempt in selling itself. Progress in satisfying Blackstone’s preconditions of the offer was insufficient, Soho said in a statement to the Hong Kong Stock Exchange on Friday in explaining the reason behind the failure.

On the market since early 2020, Soho was banking on profits from a sale to help ease the pressure from a lack of new pipeline assets and declining office rents in key Chinese cities on its profits. It is also dealing with an intensifying crackdown on developers that are leaving them with a tight liquidity position.

Blackstone made an offer to acquire Soho for as much as HK$23.7 billion or $3.05 billion, subject to regulatory approval, in June 2021. China’s State Administration for Market Regulation formally accepted the deal for review in August 2021.

The HK$5 per-share offer in June, representing a 31.6% premium, was announced by Blackrock (NYSE:BLK) in June 2021. Blackrock and Soho concluded that the pre-conditions could not be satisfied before the long-stop date, but the date would not be extended, the statement said.

Founded by Chairman Pan Shiyi and Chief Executive Officer Zhang Xin in 1995, Soho’s key assets include the Bund SOHO and Wangjing SOHO office buildings in Shanghai and Beijing respectively.

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