Hong Kong-listed property developer SOHO China's seeming attempts to offload a big part of its stake have a distinct character that can remind people of the facades of its futuristic office buildings in Beijing and Shanghai: straight lines are less likely.

Stated differently, SOHO's reported moves do not seem to progress smoothly, industry insiders said.

The Beijing-headquartered developer said in a recent announcement that the State Administration for Market Regulation has scrutinized the proposed plan of US investment firm Blackstone to acquire a majority stake in SOHO.

A prominent real estate investor with $196 billion investor capital under management, Blackstone announced on June 16 it is planning to pick up a controlling stake in SOHO China for $3 billion.

SOHO's existing controlling shareholders－co-founders Pan Shiyi and Zhang Xin－will retain a combined 9 percent stake upon the completion of the proposed transaction, with SOHO China remaining listed on the Hong Kong stock exchange, according to the announcement.

Neither side has made any further comments so far on the central regulator's latest scrutiny.

Qiu Fei, a lawyer from Yingke Law Firm (Shanghai), said regulator scrutiny is normal procedure for mergers and acquisitions under China's anti-trust law. Such reviews are usually completed within 180 days.

In March last year, Blackstone was reportedly planning to buy a massive stake in SOHO for $4 billion, but the rumored attempt fell through, leading to market speculation that SOHO may have thought it deserves a higher valuation. But both parties kept mum at that time.

SOHO China's flat financial results in 2020 offered a contrast to the high-flying image of its founder Pan Shiyi and the eye-catching exteriors of its buildings. Although turnover rose 18.65 percent year-on-year to 2.19 billion yuan ($337 million), net profit slumped 59.77 percent to 536 million yuan due to lowered valuations of all of its properties in China, resulting in just 0.1 yuan in earnings per share.

As of Dec 31, 2020, SOHO China's cash and equivalents were valued at only 466 million yuan, while its total liabilities were as high as 18.47 billion yuan, of which more than 1.01 billion yuan of debt will be due within a year.

The company's share price in Hong Kong remained between HK$2(25 cents) and HK$3 for more than six years, and no exception was made on Wednesday. Ripples appeared shortly after Blackstone's second but discounted offer this June, with the share price peaking at HK$4.78 on June 17.

The 30-year-old Blackstone nevertheless continues to evince mounting interest in China. In early November, Blackstone announced the acquisition of a 70 percent stake in the Guangdong-Hong Kong-Macao Greater Bay Area's largest urban logistics park for $1.1 billion from Guangzhou, Guangdong province-based property developer R&F Group.

Westlink, Blackstone's premium office and retail complex, was opened on the outskirts of Shanghai in August 2019. The company's first multifamily investment in Shanghai was completed last year.

As for its bid for a controlling stake in SOHO China, Justin Wai, a Hong Kong-based Blackstone real estate managing director, expressed the investment company's excitement. China, he said, is a "key market" for Blackstone's Asia business where the company has built "a diverse real estate portfolio across office, retail, logistics and residential".

"We are confident in China's long-term potential and economic recovery, which is well underway, particularly in the Beijing and Shanghai office markets," Wai said.

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