Shares of Haitong International Securities Group experienced a significant increase in value following an offer from its parent company to take the brokerage private and acquire the remaining shares it doesn't already own.
On Monday, the stock surged as much as 101.4%, reaching HK$1.43 (US$0.18), surpassing the proposed offer price of HK$1.52. As of now, shares are trading at HK$1.40.
The offer made by parent company Haitong International represents a 114.1% premium to the stock's last closing price on September 26, when it was valued at HK$0.71. Haitong International Securities announced this late on Friday, and trading for the company's shares resumed today following a trading halt since September 27.
Currently, Haitong International and its affiliated parties already own nearly 74% of the brokerage. With this proposal, the parent company would have to pay approximately HK$3.5 billion to acquire the remaining shares.
External financing will be utilized by Haitong International to finance the cash consideration required for the proposal, as stated by Haitong International Securities.
Upon a successful deal, Haitong International has plans to delist Haitong International Securities from the Hong Kong exchange.