Shares of real estate giant China Vanke Co rose as much as 8 percent during morning trading on Monday in Shenzhen amid rumors that real estate tycoon Sun Hongbin had taken a stake in the company, but the shares pared gains after Sun denied the rumors.
Vanke closed at 21.87 yuan ($3.28), up 4.39 percent.
The development followed the dramatic denial and then confirmation of media reports that Guangzhou-based real -estate company Evergrande Group had -taken a stake in Vanke last week.
Sun, chairman of Sunac China Holdings, said on Monday on his Weibo account that in response to inquiries from friends, neither he nor his company had acquired Vanke shares. Doing so "wouldn't make sense" for himself or the company.
News portal thepaper.cn reported on Monday that Sun might have spent 1 billion yuan to acquire between 0.5 percent and 0.6 percent of the company, citing sources.
The report said Sun's purchase preceded the Evergrande deal. Sun said that media organizations should value truth and their reputations, according to a report by news portal caixin.com on Monday.
Evergrande had acquired about a 4.68 percent stake in Vanke in a deal worth 9.11 billion yuan as of Thursday, the company said in a filing to the Hong Kong Stock Exchange after the market close.
Earlier in the day, Evergrande denied a report on caixin.com saying Evergrande and Chairman Xu Jiayin may have purchased about 2 percent of Vanke's shares.
Evergrande has become the fourth-largest shareholder of Vanke, currently embroiled in a battle for control, after Shenzhen-based privately held financial conglomerate Baoneng Group, China Resources and Anbang Insurance.
As of Monday, Evergrande's shareholding in Vanke increased to 5 percent, according to a Vanke stock exchange filing on Monday.
China Vanke's A shares at one point fell to a low of about 17 yuan after it resumed trading on July 4 following a month-long trading suspension.
Earlier this year, Evergrande made a general offer to buy smaller peer China Calxon Group with a total bid of 7.2 billion yuan, Reuters reported on Monday.
