Sunac Services to Buy First Service

As per an exchange filing, Sunac Services Holding Ltd. has agreed to buy over 322mn shares of Hong Kong-listed First Service Holding Ltd., i.e., 32.22% of the company’s total outstanding shares for RMB 693mn ($108mn) for cash. The filing states that Sunac Services and First Service have entered share transfer agreements on Oct. 7, but the acquisition is subject to approval from regulators, due diligence and other terms stipulated in the agreement. Sunac Services’ cash offer of HKD $2.6167 ($0.13) per share represents a 91% premium on First Service’s closing price on Oct. 7.  The announcement adds that Sunac Services plans to buy First Service’s remaining shares and make it a wholly-owned subsidiary.

First Service has the same owners as Beijing developer Modern Land (China), which missed a payment deadline last week. Modern Land’s Chairman Zhang Lei and President Zhang Peng together own over 57% of First Service. With the acquisition, Sunac Services aims to “strengthen the overall competitiveness and market influence” in their property management and to gain “core competence and competitive advantage” in green construction. Sunac’s filing adds that First Service is “a pioneer in the green service industry” and “will be greeted by huge development opportunities with its years of accumulation and advantages”.

Sunac’s 7.5% 2024 was up 1.05 points to 67.338.

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