Concerns over credit risk drove UBS to pull out as financial adviser weeks ago to the $4.4 billion deal that took Dalian Wanda Commercial Properties private, allowing a Chinese bank to step in.
The Financial Times (paywall) reported a senior Wanda official as saying that UBS «had become uncomfortable with that deal’s credit risk profile» and backed out of the transaction it had originally proposed ahead of the offer in May.
Wanda had raised about HK$28.8 billion during its initial public offering in Hong Kong in December 2014.
Other Banks Also Declined
The withdrawal of the Swiss banking giant saw Wang Jianlin’s property conglomerate engage China International Capital Corp, (CICC) which took over Hong Kong’s biggest privatisation deal.
Wanda also approached at least one other foreign bank about working on the deal but the offer was spurned, leaving China’s CICC to run the process single-handedly. Hong Kong rules require banks to be satisfied with the sources and availability of funds when offers are made.
Withdrawn From Stock Exchange
Shareholders had approved Wang’s share buy-back offer on August 15, which has paved the way for the relocation of the company’s listing from Hong Kong to mainland China.
Wanda’s shares were withdrawn from the Hong Kong stock exchange last month.
