Market participants are keen to know how the asset managers will vote just one week from the decisive H-share class meeting scheduled for August 15. APG AM and BlackRock could make or break the deal because they hold enough shareholder votes to block the transaction if both vote the same way.
According to Hong Kong listing regulations, Dalian Wanda’s delisting proposal will require votes in favour from the holders of 75% of independent H-shares, with no more than 10% actively voting against it. As of the end of Friday, APG Asset Management had 4.95% while BlackRock owned 6.02% of the company.
There has been scepticism over whether APG will vote in favour of the take-private offer after the firm’s corporate finance director, Yoo-Kyung Park, publicly described the offer as not very attractive.
Wang initially proposed to take Dalian Wanda shares private for HK$48 per share, the same price the property giant set for the company's initial public offering in December 2014. But the billionaire raised his bid by 10% to HK$52.8 per share after some investors voiced concerns about the value of the deal.
BlackRock has accumulated Dalian Wanda shares at an average cost of HK$58 per share according to proxy advisory firm Glass Lewis, which means it will suffer a loss should it accept Wang’s offer.
APG and BlackRock are among the 11 cornerstone investors that took a stake in the company’s $3.7 billion IPO in 2014.
BlackRock is not known for shareholder activism or for blocking the deals of its portfolio companies. In a rare case earlier this year, the asset management firm publicly called upon minority investors to vote against a proposal by Hong Kong-listed G-Resources to sell an Indonesian gold mine at close to book value, saying that the mine was an attractive asset and the price did not make sense.
The asset manager owned 8% of G-Resources before the shareholder vote in March, while it has been gradually trimming its stake in Dalian Wanda from 6.6% at the time of the take-private announcement to 6.02% last Friday.
Wang is attempting to take Dalian Wanda private and relist the firm on the mainland market in the expectation on a higher market valuation.
Dalian Wanda closed at HK$50.2 on Friday, representing a 4.9% net spread over the offer price —implying that the market remains sceptical that the take-private will be successful.
CICC is the sole advisor on the take-private transaction.