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Glorious Property gets S$736m buyout bid from founder

HONG KONG — Glorious Property stock soared by a record yesterday in Hong Kong following a HK$4.57 billion (S$736 million) offer by Chinese billionaire Zhang Zhirong to take the company private after the developer’s shares fell on slumping sales and amid financial woes at another company he controls.

HONG KONG — Glorious Property stock soared by a record yesterday in Hong Kong following a HK$4.57 billion (S$736 million) offer by Chinese billionaire Zhang Zhirong to take the company private after the developer’s shares fell on slumping sales and amid financial woes at another company he controls.

Mr Zhang will pay HK$1.80 a share — 45 per cent more than the last traded price of HK$1.24 — for all outstanding stock, Glorious Property said in a Hong Kong stock exchange filing late on Thursday. Mr Zhang, who has a 68.4 per cent stake in the company he founded, intends to finance the purchase by using an external loan facility.

Glorious Property shares surged as much as 40 per cent, the biggest intraday gain since the shares debuted in October 2009, and closed 33 per cent higher at HK$1.65 in Hong Kong. The stock, which resumed trading yesterday, had been suspended since Oct 18.

The company’s sales have slumped this year and its shares have tracked the decline in China Rongsheng Heavy Industries Group Holdings after the shipyard co-founded by Mr Zhang sought a government bailout amid slumping global demand for vessels. The developer’s shares were trading at less than half their net asset value before the buyout offer.

“The offeror considers that the depressed price of the shares has had an adverse impact on the company’s reputation with customers, and therefore on its business and employee morale,” the firm said. Mr Zhang plans to delist the company after completing the buyout, it added.

Mr Hugo Hou, a Hong Kong-based property analyst at Haitong International Securities, said: “Investors are losing confidence because of sluggish property sales of Glorious and increasing difficulty for it to get financing, while Glorious’ stock valuation is very low and the company still has some valuable assets. A privatisation plan sounds reasonable in this case.”

The developer with residential, office and retail projects in 12 Chinese cities, including Beijing, Shanghai and Nanjing, has failed to meet its annual sales target every year since 2010, when the government started introducing property curbs as price gains accelerated, Mr Hou said earlier in a research note. BLOOMBERG

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