From mid-2015 to 2017, Vanke, one of China’s largest real estate developers, became embroiled in a drawn-out hostile takeover bid. The battle started when a relatively unknown Chinese activist investor, the Baoneng Group, quietly began to buy up shares of this star performer. By late 2015, Baoneng emerged as Vanke’s largest shareholder. Vanke’s major rival, China Evergrande, also joined the takeover effort. Together, both worked to oust Vanke’s existing management, including its internationally known founder, Wang Shi. But they did not succeed after the Chinese government stepped in, tightened the leash on debt-driven acquisition strategies and ultimately transformed one of the country’s flagship real estate developers into a state-owned entity. Perhaps to no one’s surprise, the Vanke case sparked national public debate over the nature of capital markets and corporate governance in China, and of course, the ongoing role of the Chinese government in the economy.
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