PAG agreed to buy a 51% controlling stake in Evergrande Property Services Group from the liquidators of China Evergrande Group for HK$4.03 billion, at a price well below where the shares had been trading.

The Asia-focused investment firm's vehicle, Everest Holdings I, signed the share purchase agreement on Oct. 28 after the market closed, according to a joint announcement filed with the Hong Kong stock exchange on Friday. Once the purchase completes, Hong Kong's takeover rules require PAG to offer HK$0.8359 a share in cash for the rest of the company. That price is 29.5% below the stock's HK$1.185 close on Oct. 28, and PAG said it will not raise it.

For investors in Asia, the deal shows what a large Chinese property business fetches when court-appointed liquidators run the sale, and how much it can do for Evergrande's offshore creditors. The headline price alone exceeds the US$435.9 million (HK$3.4 billion) the liquidators, Edward Middleton and Tiffany Wong of Alvarez & Marsal, said on Oct. 22 they had recovered from asset sales and loan settlements so far, The Standard reported, citing Reuters.

Trading was halted Thursday pending the announcement. On Friday the shares opened at HK$1.05, fell as low as HK$0.95 and closed at HK$0.975, down 17.7%, according to Yahoo Finance data. Even so, the close was 16.6% above PAG's offer price, so holders could still get more in the market than the offer pays.

How PAG priced the Evergrande stake

The discount reflects how far the stock ran during a sale that began more than a year ago. The liquidators told the company on Sept. 10, 2025, that they were looking for a buyer for the 51.016% block. The shares closed at HK$0.92 that day, and the offer is 9.1% below that level, the filing shows. Its highest close over the period the filing reviews was HK$1.66, on May 4.

Against the books, PAG is paying up. The offer is 268.7% above unaudited net asset value of about HK$0.23 a share at June 30. At HK$0.8359, the whole company is valued at about HK$9.04 billion, the filing says. That is roughly eight times its 2025 net profit of 1.01 billion yuan, converted at the filing's year-end 2025 exchange rate, by Capital Times' calculation. The unit was valued at more than HK$94 billion when it listed in 2020 and about HK$200 billion at its 2021 peak, The Standard reported in April, citing Reuters.

The sale price is split between two sellers. PAG pays HK$0.8359 a share for 147.2 million shares held directly by China Evergrande and HK$0.7271 a share for 5.37 billion shares held by CEG Holdings (BVI). Under a side letter, it will also pay 500 million yuan at completion toward taxes, fees and other liabilities of CEG Holdings, which the filing says equalizes the benefit per share.

PAG will fund the deal with bank loans secured on the shares and an equity commitment from PAG Fund IV, which wholly owns the buyer. Goldman Sachs, its financial adviser, said it is satisfied the money is available. PAG says it manages more than US$60 billion.

What the buyer gets, and what creditors get

Evergrande Property Services managed about 603 million square meters of floor space at June 30. First-half revenue rose 4.5% to 6.94 billion yuan and net profit was 503.3 million yuan, its interim report showed. Related-party revenue fell to 2.7 million yuan, leaving third-party clients as essentially its entire business.

The parent left scars. Banks enforced pledges over 13.4 billion yuan of the unit's deposits, a loss fully written off in 2021. After winning court judgments against China Evergrande and others, the unit had recovered about 9.5 million yuan by June 30, the report said.

PAG said in the filing that it values the recurring income from properties across China and that moving the stake out of the liquidation estates will end prolonged uncertainty. It plans no major changes to operations or staff, will nominate new directors and intends to keep the shares listed.

Earlier attempts to sell the stake stalled. Talks in 2021 to sell it to Hopson Development for about HK$20 billion were put on hold pending the blessing of the Guangdong provincial government, Reuters reported at the time. In April, the liquidators entered exclusive talks with an unnamed bidder. On Sept. 30 the company disclosed another exclusivity agreement, again without naming the bidder, and Reuters reported on Oct. 9, citing two people close to the deal, that PAG was in exclusive talks for the stake.

For creditors, the money helps but barely dents their claims of about US$46 billion. Evergrande defaulted on most of its roughly US$300 billion of liabilities, and the liquidators aim to pay a first interim dividend in the first half of 2027. The sale also comes as China's property slump continues to weigh on growth.

Beijing's antitrust review comes first

The deal cannot close without clearance from the anti-monopoly bureau of China's State Administration for Market Regulation, a condition neither side can waive. The shares must also stay listed, and no claims over the shares or court orders blocking the sale may arise. The long stop date is Feb. 12, 2027, and completion falls on the 15th business day after the conditions are met. A PAG affiliate paid a HK$6 million deposit, half of which the sellers can keep in some cases if regulatory clearance fails.

Once made, the offer will be unconditional, with no minimum acceptance level. An independent board committee, advised by Altus Capital, will say whether HK$0.8359 is fair. The offer document is due within 21 days of the Oct. 30 announcement, by Nov. 20, unless Hong Kong's takeovers regulator allows more time.