China's sports industry is "growing," even as the nation's football team continues to plumb the depths. Photo: Wikimedia Commons

China Aoyuan Property Group, a Guangzhou-based property developer, is looking to purchase a 22% stake in China Sports Industry Group from its major shareholder.

The group is a sporting events management company currently owned by the investment arm of the nation’s top sport governing body, the General Administration of Sport of China (GASC), a state organization. China Sports is a listed entity on the Shanghai Stock Exchange and owns sports stadiums in Shenyang and Dalian.

Aoyuan Property, a Hong Kong-listed company, said in a notice released on Wednesday evening that it had paid the 50 million yuan (US$7.53 million) refundable tender fee and the price of the tender would not be lower than 17.53 yuan per share. The company’s founder and chairman is Guo Ziwen. His older brother, Guo Zining, acts as the legal representative of Aoyuan Property.

The investment arm of GASC has been looking to sell its stake in China Sports since last November. It went on a public offering in late December, when Alibaba was said to be one of the companies interested in buying the stake, according to Bloomberg.

In the middle of April, however, China Sports announced its five-month search for a suitable buyer had failed. Four parties, namely LeTV founder Jia Yueting, billionare investor Liu Yiqian, the Bund Holding Group and the Kaisa Group, applied separately to buy the stake using  third party vehicles but all bids were not approved by the GASC, according to a report by The Paper.

The sports industry has been attracting significant corporate investments, with notable companies such as Wanda Group and Alibaba looking to expand their share of the pie. The government predicts the industry will exceed US$432 billion in value by the year 2020.

As for China Sports, the deal still has an “element of uncertainty” as to whether it will be approved, according to the company’s announcement. It will require the approval of GASC as well as the finance ministry, the announcement said.