Hong Kong developer New World Development Co saw its shares surge on Friday following a Bloomberg report that Blackstone Inc is in advanced talks to become the company’s single largest shareholder. Shares climbed as much as 12% to HK$12.45, reaching their highest level since November 2023, before settling at a 6% gain. This potential deal could see Blackstone overtake the Cheng family as the controlling stakeholder, although the size and structure of the stake remain undisclosed.

The report, citing anonymous sources, indicates that discussions are ongoing, but there is no guarantee a deal will materialize. New World has been under financial pressure due to high debt levels and weak property sales, reflecting broader challenges in the Hong Kong and Chinese property markets. The company acknowledged being approached by potential investors but emphasized that no binding agreements have been reached.

This potential investment from Blackstone comes at a critical time for New World, which has been grappling with financial difficulties. The developer, controlled by the Cheng family through Chow Tai Fook Enterprises, has been seeking ways to alleviate its debt burden. A significant investment from Blackstone could provide the much-needed financial stability and strategic support to navigate the current market challenges.

Investors are closely watching this development as it could signal a shift in the Hong Kong property market. Blackstone’s interest may indicate confidence in the sector’s recovery or a strategic play for long-term growth. The outcome of these talks will be crucial for New World’s future and could influence other developers facing similar challenges.