Just 15 months after making its debut on the Hong Kong stock market, Wang Jianlin isn’t happy with how Hong Kong is valuing his Dalian Wanda Commercial Properties.


Wang, the tycoon who runs China’s Dalian Wanda Group has set up a special purpose vehicle and is offering $4.4 billion in cash to buy all the Hong Kong-listed shares of the property unit. He wants to take it private before relisting it in Shanghai where he hopes it will gain better valuations.

Currently, companies listed on the Chinese mainland are receiving higher valuations than those in Hong Kong. Part of this is because of the large pool of retail investors on the mainland.

An index tracking dual-listed companies shows mainland listings trade at an average 34% premium to the same company listed in Hong Kong, reported Reuters.

Investors in the special purpose vehicle will receive up to 12% annual interest on their holdings if the property arm fails to relist in China within two years.

At 52.80 Hong Kong dollars per share ($1 = HK$7.7679), the buyout offer represents a 44.5% premium to the unit’s closing price on March 29. It’s also a 10% premium to Wanda Commercial’s IPO price and values China’s biggest commercial property developer at about $31 billion.

However, the stock just ended a one-month suspension, and investors were not encouraged. On Monday, the stock lost 2.6% to close at HK$48.70.

Dalian Wanda said in a statement that it would not increase the offer price.

Wanda Commercial’s shares were valued at an estimated 8.6 times earnings in 2016, much lower than an average of 29.1 times for commercial property developers listed on China’s domestic A-share market, according to a document sent to investors, reported Reuters.

If Wanda Commercial does not get regulatory approval to launch a planned initial public offering, it may seek a backdoor listing on the Shanghai exchange, according to two people with knowledge of the matter.

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