Asia-focused investment firm PAG agreed to buy a controlling stake in Evergrande Property Services Group for about HK$4.03 billion, or roughly $514 million, giving the liquidators of China Evergrande Group one of their largest recoveries yet from the collapsed developer.
PAG will acquire 51.016% of the Hong Kong-listed property manager after a competitive auction run by the liquidators of China Evergrande and its holding company, CEG Holdings. The shares are being bought at HK$0.8359 apiece, about 29% below where the stock last traded before the announcement. PAG will also pay 500 million yuan at completion to cover certain taxes, fees and liabilities of CEG Holdings.
Mandatory offer at the same price
Under Hong Kong takeover rules, completion will oblige PAG to make an unconditional cash offer for the remaining shares at the same HK$0.8359 price, which it has said it won’t raise. That offer values the entire company at about HK$9 billion. Shares in Evergrande Property Services fell about 13.5% when trading resumed on Friday, closing in on the offer level. PAG will fund the purchase and any shares tendered in the offer with an acquisition loan and equity from its fourth flagship fund.
PAG said it intends to keep the company listed and doesn’t plan major changes to its operations or staff beyond nominating new directors. It described the business as producing steady, recurring fees from a diversified portfolio of managed properties across China. Goldman Sachs is advising PAG; UBS and Citic Securities advised the sellers.
A key step in the Evergrande wind-down
China Evergrande defaulted in 2021 with more than $300 billion of liabilities, and a Hong Kong court ordered it wound up in January 2024. Its liquidators, who face creditor claims of about $46 billion, began marketing the property-services stake about a year ago, and an earlier exclusive negotiation with another bidder lapsed in May. The deal still needs clearance from China’s market regulator, a condition that can’t be waived, and the parties can terminate the agreement if conditions aren’t met by Feb. 12, 2027.
