One of heavily-indebted China Evergrande’s largest shareholders, Chinese Estates Holdings, has seen its value soar after a privatization offer from the family of Hong Kong tycoon Joseph Lau Luen-hung, reports the South China Morning Post. The stock’s market value increased by $226 million.
The shares jumped 32% to $0.49 at the close of trading on Thursday in one of their biggest rallies since a 60% surge in June 2020. The gain added to a 2.8% appreciation last month, halting a six-month rout partly associated with its soured investment in debt-laden China Evergrande Group.
Lau’s spouse Chan Hoi-wan offered to buy 25% of the company from minority investors at $0.51 per share, or 83.5% premium to its last-traded price before the privatization announcement late Wednesday. The offer will cost $244 million and value the entire company at $980 million. Lau and Chan currently control 75% of Chinese Estates.
The privatization offer came two weeks after the group decided to dump all its interest in Evergrande as the Chinese home builder teeters on the brink of collapse under more than $300 billion of liabilities.