China’s Zhongtai Securities pays US$270m for Hong Kong listing through Quali-Smart takeover
Proposed deal gives state-controlled broker access to international capital markets amid ongoing investigation by mainland regulator
Mainland securities broker Zhongtai Securities’ wholly owned Hong Kong unit has proposed to take over Hong Kong-listed corporate advisory and toymaking company Quali-Smart Holdings in a HK$2.15 billion (US$270 million) deal, which will give the mainland firm listing status in Hong Kong.
The proposed takeover by Zhongtai Financial International, its Hong Kong unit, comes amid doubts over its own application to list on the Shanghai Stock Exchange following an investigation into its operations by Chinese regulators.
Quali-Smart will issue 2.28 billion new shares to Zhongtai Financial International in an all-cash deal, which will give it a 60.77 per cent stake in the enlarged share capital of Quali-Smart, according to exchange filings on Sunday.
Zhongtai Securities applied to list in Shanghai in 2016, but in September that year it disclosed that
the China Securities Regulatory Commission was investigating it for suspected breaches of securities and futures laws and regulations. A Hong Kong public relations company representing Zhongtai Securities said it would not comment on its pending A-share listing application. The status of the investigation by the commission also remains unclear.
At 35 HK cents a share, the subscription price represents a 40.7 per cent discount on 59 HK cents, the stock’s closing price on Friday, the last trading day before the announcement.
Quali-Smart’s shares closed Monday trade at 66 HK cents, up 11.86 per cent.
