Bosses of Vanke, China's largest residential developer by sales, have for months been trying to stave off what would be the country's first hostile blue-chip takeover, after a private conglomerate purchased a more than 20 per cent stake.
Evergrande announced it had paid 9.11 billion yuan (USD 1.37 billion) for 4.68 per cent of Vanke shares in a statement filed to the Hong Kong stock exchange yesterday.
Vanke confirmed the deal today in a statement to the Shenzhen exchange, where its shares traded up 6.5 per cent by the close.
Share prices on the Hong Kong exchange were also boosted 1.6 per cent by the end of play.
It is not yet clear where Evergrande fit in to the tussle for Vanke, which has been triggered by private conglomerate Baoneng.
With an eye on its valuable land bank, Baoneng began buying shares in Vanke last year, becoming its largest shareholder in December with a 24.26 per cent stake.
It announced in June a 45.6 billion yuan asset swap and restructuring that would see state-owned subway operator Shenzhen Metro Group overtake Baoneng as its biggest shareholder.
Trading in its Shenzhen shares resumed in July and immediately plunged by the 10 per cent daily limit.
China's market regulator condemned the management team and major shareholders of Vanke, saying it has "intensified conflicts" and "disregarded the stability of the capital market".
Hong Kong's rules on share suspensions are stricter than the mainland, and trading in Vanke resumed after two weeks.