Haitong Securities Takes Over Hong Kong Securities Firm

Vanessa Doctor

24 November 2009

Haitong Securities, the Shanghai-based securities firm, has taken over Taifook Securities for HK$1.82 billion ($235 million).

The purchase was coursed through Hong Kong infrastructure firm NWS Holdings, which sold its 52.86 per cent stake in Taifook for HK$4.88 per share. NWS still owns 9 per cent of the company.

The deal presents a good opportunity for Haitong to expand its distribution network in Hong Kong. Taifook currently services around 120,000 clients from its 12 offices in Hong Kong and Macau, two in Shanghai and Beijing, and several others in Guangzhou, Huangzhou, Shenzhen and Xiamen.

In a related report on The Wall Street Journal, Monday's takeover announcement has spurred a general share offer to Taifook shareholders, considering that the firm has 24 million options outstanding. Should all options be exercised, Haitong stands to spend an extra HK$1.8 billion to close the transaction, the news service said.

HSBC has been appointed lead manager for Haitong, while Clifford Chance and Bank of China's BOCI are working with NWS.

The deal has yet to receive regulatory approval.