(Yicai Global) Aug. 9 -- Chinese regulators are looking into the proposed purchase of a majority stake in real estate developer Soho China by US private equity giant Blackstone Group, part of regular procedure for all mergers and acquisitions in the country, the real estate developer said last week.

All mergers and acquisitions must pass by the State Administration for Market Regulation, an anti-monopoly law expert told Yicai Global. In most cases, this is just part of normal process. Since the anti-trust law was brought in 13 years ago, only 50 M&As have had additional requirements added and only three were blocked, he added.

New York-based Blackstone plans to buy an almost 55 percent stake in the developer for HKD23.7 billion (USD3 billion), Beijing-based Soho said in June. Should it be successful, it will be Blackstone’s largest real estate investment in China.

However, there has been an unexplained delay in the issuance of the tender offer and documents to shareholders due to a failure in achieving certain preconditions, Soho said on July 6, without going into further details. The deadline has thus been extended to Dec. 31 from July 7, it added.

Soho has not been performing well in recent years, an insider said. Its return on equity has remained low and the company has very high liabilities and costs. Blackstone will not find it easy to leverage Soho’s considerable commercial assets, even if it passes the anti-trust review.

Soho’s share price [HKG:0410] closed up 0.31 percent at HKD3.23 (USD0.42).

Editors: Liao Shumin, Kim Taylor