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Shares jump 36% for major Chinese conglomerate unit on news of $1 billion deal

Wanda Group's chairman Wang Jianlin makes speech at China University of Political Science and Law on May 12, 2017 in Beijing, China.
VCG | Getty Images
Wanda Group's chairman Wang Jianlin makes speech at China University of Political Science and Law on May 12, 2017 in Beijing, China.

Wanda Hotel Development, a unit of Chinese conglomerate Dalian Wanda Group led
by Wang Jianlin, said it would buy assets worth over 7 billion yuan ($1.05 billion) from Wang-controlled companies as part of a restructuring.

Shares of Wanda Hotel jumped as much as 36 percent on the deal, although those gains were moderated in later trading.

The Hong Kong-listed company said it would buy the entire equity interest in theme park operator Wanda Culture Travel Innovation Group from Wang's Beijing Wanda Culture Industry Group for 6.3 billion yuan.

The deal would be settled either in cash or through the issue of shares or convertible bonds, it added.

It will also buy hotel operator Wanda Hotel Management (Hong Kong) from Wang's Dalian Wanda Commercial Properties for 750 million yuan in cash, it said in a filing to the Hong Kong bourse late on Wednesday.

Wanda Hotel said it would then sell its interest in Wanda Properties Investment, Wanda International Real Estate Investment, Wanda Americas Real Estate Investment and Wanda Australia Real Estate to Wang's Dalian Wanda Commercial for an amount that is yet to be fixed.

It gave no further details.

Trading in Wanda Hotel shares, which were suspended on Wednesday, will resume on Thursday.

Chinese banks have been told to stop providing funding for several of Wanda's overseas acquisitions as Beijing tries to curb the conglomerate's offshore buying spree, according to
sources familiar with the matter.

Run by China's richest man, Wang Jianlin, Wanda is one of a handful of Chinese conglomerates that have expanded aggressively abroad over the past few years, into areas well beyond their
original business - in this case, property.

Last month, Dalian Wanda Group altered a deal with developer Sunac China after banks scrutinized their credit risk, by bringing in another developer, Guangzhou R&F Properties.

—CNBC contributed to this report.