Blackstone in Talks to Acquire SOHO China Private Ltd

U.S based multinational private equity and asset management firm Blackstone Group Inc. (BX) is currently in talks said to be in advanced stages with an aim of acquiring SOHO China Ltd private. This was disclosed by sources directly linked to the matter.

According to the sources, the deal is estimated to be worth $4 billion. Following this Monday’s revelation, shares of Honk Kong listed SOHO China spiked up to a record 21 month high moments after the announcement went viral.

SOHO China which engages in prime office development in the Chinese economy is said to being in continued talks with Blackstone since the first week of February whereby Blackstone is offering HK$6 ($0.77) for every share of SOHO.

The above price shows the company’s shares will be paid at a share premium of around 100% considering the company share price has been trading on an average of HK$3.03 since the year began.

Thereafter, after acquisition deal sails through, Blackstone is intending to privatize SOHO. After the deal has been finalized the privatization process will kick off immediately revealed the sources.

One of the conditions in the deal is that Blackstone will take over all SOHO China’s debts, according to its interim reports released last year June, SOHO China’s debt stood at 32.68 billion yuan ($4.70 billion).

Citing the same interim report also, SOHO China valued its investment properties at $8.78 billion at the end of the same period.

However after release of this report the company started selling prime commercial property assets in China with a claim that its founders were focusing on penetrating in overseas markets.

Among the assets sold by the company included eight office projects in Beijing and Shanghai. Blackstone was among the buyers of these assets.