Dalian Wanda Group Seeks to Delist Its Commercial Property Arm
HONG KONG — Dalian Wanda Group of China said Thursday that it may privatize its commercial property company in a deal that could be worth about $4 billion.
The potential delisting of Dalian Wanda Commercial Properties comes just 15 months after it raised $3.7 billion in a Hong Kong initial public offering — the largest listing in Asia for 2014. The company did not say why it had decided to think about privatizing so soon after going public.
The group said in a news release on the Hong Kong Stock Exchange that it would offer no less than 48 Hong Kong dollars a share, or about $6.20 a share. That would be almost 24 percent higher than the price at which the stock closed on Wednesday.
Dalian Wanda shares, which had sunk well below their initial offer price, were bolstered by the news and leapt about 20 percent on Thursday morning. By lunchtime, they were up about 18 percent, at $45.85.
The property unit was set up in 2002 and spread across China, building developments that combined shopping centers, theaters, hotels, offices and residential blocks. But China’s economy is now being dragged down by a housing glut, and real estate investment has nearly come to a standstill after more than a decade of double-digit growth.
Fitch Ratings downgraded the company in February, saying in a note that “The downgrade reflects our expectation that Wanda’s development properties’ (DP) contracted sales in 2016 and 2017 will fall to a level not sufficient to support its ongoing capex plans and development expenditure.”
The parent Dalian Wanda Group, however, has been busy investing far and wide in the film industry. It announced in January that it was buying Legendary Entertainment, one of Hollywood’s biggest film production companies, for as much as $3.5 billion. It had also snapped up the theater chain AMC Theaters and begun construction of an $8.2 billion studio complex.