[photopress:property_JinMaoTower.jpg,full,alignright]Franshion Properties China will purchase hotel and commercial property developer China Jin Mao for RMB11 billion ($1.58 billion). Franshion, which is the property unit of state-owned Sinochem, will buy its parent’s 55% stake in Jin Mao, the company said it a statement to the Hong Kong Stock Exchange.
Under the agreement, Franshion will pay RMB2.41 billion in cash and issue new shares to its parent worth RMB3.62 billion.
Franshion said it will purchase the remaining 45% stake in Jin Mao held by seven other state-owned firms, paying about 40% in cash and the balance in new shares.
The company will issue the shares at US$0.44 or a 3.7% discount to the closing price of Franshion’s Hong Kong-listed shares Thursday.
Jin Mao, launched in 1983 with the backing of 10 state-owned corporations, owns the Jin Mao Tower, China’s tallest skyscraper, located in Shanghai’s financial and economic district.