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Friday, August 5, 2016, 11:43

Vanke shares climb as Evergrande buys stake

By Reuters

HONG KONG - Shares of developer China Vanke Co Ltd jumped on Friday after peer China Evergrande Group bought a nearly 5 percent stake, adding a new twist to a battle for control of the country's biggest residential property firm.

Vanke's Shenzhen shares gained more than 6 percent after the country's second-largest property developer said late on Thursday it had acquired a 4.68 percent stake for 9.1 billion yuan (US$1.4 billion). The move makes Evergrande Vanke's fourth-largest shareholder, behind Anbang Insurance, which holds more than 6 percent.

By 0245 GMT, Vanke's Shenzhen shares had dropped back but were still up more than 2 percent on Friday, while its Hong Kong-listed stock was up 3 percent. The benchmark Hang Seng Index rose more than 1 percent.

The move by Guangzhou-based Evergrande is the latest round in a power tussle that has seen Vanke try to fend off a potential hostile takeover by privately owned conglomerate Baoneng Group, a battle that has drawn the scrutiny of regulators.

Last year, Baoneng displaced state-owned China Resources as Vanke's largest stakeholder. Vanke chairman Wang Shi openly opposed the move, calling Baoneng "barbarians" with no credibility.

Evergrande investors also welcomed the move on Friday, its shares surging more than 6 percent early on Friday.

"Vanke is one of the largest property developers in (China) with strong results. The acquisition is an investment in the group," Evergrande chairman Hui Ka-yan said in a statement to the Hong Kong stock exchange.

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