Original title: Modern Land regrets Sunac Services’ termination of acquisition of First Service Holdings
21st Century Business Herald reporter Kong Haili reporting from Beijing
Sunac Services (01516.HK)’s plan to acquire First Service Holdings (02107.HK) came to an abrupt end after nearly 3 months.
On January 3, Sunac Services announced that due to the failure to reach a formal agreement with the seller on the deadline of December 31, 2021, the agreement to acquire a portion of the holdings of First Services has been terminated.
According to Sunac Services, on December 31, 2021, the seller suddenly overturned the consensus reached between the two parties on transaction prices and transaction arrangements, which ultimately led to the failure to complete the signing of the formal agreement.
According to Sunac’s service announcement, the liquidity problems encountered by First Service Holdings’s related party Dangdai Real Estate before, and the feasibility and sustainability of First Service Holdings’ business from Dangdai Real Estate and the availability of receivables from Dangdai Real Estate Retrievability directly caused major uncertainty.
Sunac Services stated that, based on these circumstances, the two parties had previously negotiated the price reduction and transaction arrangements, and the formal agreement after negotiation and adjustment has been expressed in writing by the seller without any objection. But the opponent suddenly overthrew it on December 31.
As of press time, First Service Holdings has not yet made an announcement on this.
After the termination of the agreement, in accordance with the rules, the seller must return the deposit previously paid by Sunac services within a certain period of time.
The two parties’ transaction plan starts in early October 2021. On November 1, Sunac Services and First Services Holdings jointly announced that they had entered into a share transfer agreement on October 7, 2021. Sunac Services acquired 322 million shares of First Services at a total consideration of 692.7 million yuan, which accounted for The total share capital is about 32.22%.
In the acquisition pricing, the consideration per share is 2.15 yuan (equivalent to 2.62 Hong Kong dollars), which is a 91% premium to the 1.37 Hong Kong dollars closing price of First Service on October 8 during the trading suspension period.
Sunac Services disclosed in the announcement at the time that the acquisition of First Service was optimistic about its green human settlement service capabilities and third-party expansion space.
As of June 30, 2021, First Service Holdings’ contracted construction area was approximately 72.994 million square meters, and its under-managed construction area was approximately 53.202 million square meters. The proportion of non-residential businesses in the under-managed construction area was approximately 60%.
(Author: Kong Haili Editor: Li Qingyu)