FAST NEWS: Hopefluent, Country Garden call off strategic cooperation
The Latest: Country Garden Services (6098.HK) and Hopefluent (0733.HK) announced on Wednesday that they have called off their strategic cooperation that would have seen the former boost its stake in the latter.
Looking Up: Country Garden Services may have chosen to abandon the deal to conserve its resources to tackle future challenges created by China’s weak real estate and stock markets.
Take Note: Country Garden Services is a top real estate manager in China, meaning the tie-up could have provided a major new source of customers for Hopefluent.
Digging Deeper: Country Garden Services and Hopefluent signed their strategic cooperation agreement last year, with the former agreeing to pay HK$115 million ($15 million) to boost its stake in the latter from an original 25% to 35.63%. At the same time, the stake held by Hopefluent’s major shareholder Fu Wai Chung would have been reduced to less than 30%, giving Country Garden Services control of Hopefluent. On the day the original news was announced, Hopefluent’s share price soared by more than 60%.
Market Reaction: Hopefluent shares fell nearly 30% when Hong Kong’s stock market opened on Thursday, and closed down 42% at HK$0.61 by the midday break. Country Garden Services ‘s shares were unaffected, rising 2.1% to $5.73 in the morning.
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