The acquisition of Brookdale Senior Living, based in Brentwood, by the Beijing real estate firm Zhonghong Zhuoye Group Co Ltd has stalled, the Financial Times reported.
The deal was said to be $4 billion for the senior living provider.
With 635 employees, Brookdale is the eighth largest corporate headquarters in the county. They are located at 111 Westwood Place in Brentwood.
Zhonghong has since had trouble coming up with the capital, the report said, citing unnamed sources.
Zhonghong secured a Chinese bank for onshore and offshore loans, the report revealed. The offshore loan was approved by regulators, but the onshore loan has not been.
The bank now believes Zhonghong to be “high risk,” it has chosen to place that part of the lending on hold.
The report goes on to say:
“Following an outflow of capital from Chinese companies to overseas investment targets, Chinese regulators have heightened the level of scrutiny on outbound acquisitions since June, resulting in a slowdown in dealmaking. Additionally, the banking regulator has requested that banks evaluate their level of exposure to certain firms, and the foreign exchange watchdog is reportedly looking into the utilization of fake collateral for guaranteeing offshore loans.”
In March, the Chinese investment banking firm Beijing, Cindat Capital Management Ltd, predicted the probability that Brookdale would be sold between then and the end of 2017 was more than 50%.
Brookdale shares were down 7% during trading following the reports Monday. In response to a request for confirmation on the report, a Brookdale spokeswoman stated that the company does not comment on market speculation or rumors.
