Guangzhou-based property developer Evergrande Group has acquired a 4.68 percent stake of China Vanke Co in a deal worth 9.11 billion yuan ($1.4 billion) as of Thursday, according to a -filing Evergrande sent to the Hong Kong Stock Exchange after the market close on Thursday.
Evergrande is acquiring 516 million shares of Vanke, the filing noted, citing Vanke's "strong financial performance" as the reason for investment.
The deal was equivalent to about 15 percent of Evergrande's market value based on the Thursday closing, domestic news portal sina.com.cn reported.
The transaction will make Evergrande the fourth-largest shareholder of Vanke after -Baoneng Group, China Resources and Anbang Insurance.
Earlier in the day, Evergrande denied a report on domestic news portal caixin.com that cited people familiar with the matter as saying Evergrande and its chairman Xu Jiayin may have purchased about 2 percent of Vanke's shares.
The Caixin report lifted -Vanke's shares in Shenzhen before the post-closing announcement by Evergrande.
Vanke's shares closed up the 10 percent daily limit at 19.67 yuan on Thursday, its biggest increase since the stock resumed trading in July.
Vanke's shares had increased almost 5 percent in the 10 trading days before the deal, according to another Sina report.
"The entry of Evergrande can be regarded as a powerful reinforcement to Baoneng, which has been under pressure to bow out amid the escalating internal turf war," Li Shifeng, a partner at Beijing-based asset management firm Tao Feng Fund, told the Global Times on Thursday. Li said the deal relieved that pressure.
"Meanwhile, for Evergrande, this is also a short-term strategic investment," Li noted.
"Because the company has been ambitiously advancing -itself to be the leading player in the property industry," said Li.
Evergrande has also acquired stakes in several listed property companies this year.
It paid 3.6 billion yuan in April to become the controlling shareholder of China Calxon Group, the Sina report said on Thursday.
According to its financial statements, Evergrande's sales amounted to 43 billion yuan in July, up 37.2 percent from June for its best month ever.
Meanwhile, because of the struggle for control between -Vanke's management team and the company's major -shareholders, Vanke's sales volume stood at 27.4 billion yuan in July, down 35.3 percent from June, the Sina report noted.
