China’s Ant Group forays into brokerage business with $362 million Bright Smart buy

HONG KONG (Reuters) - China’s Ant Group is buying a controlling stake in Hong Kong-based brokerage Bright Smart Securities & Commodities Group for about $362 million, marking the fintech firm’s first acquisition of a securities brokerage licence.

Ant Group agreed to buy a 50.55% stake in Bright Smart for HK$2.81 billion ($362.26 million), the firms said in a joint statement.

Bright Smart chairman Yip Mow Lum is selling 857.98 million shares at HK$3.28 each to Ant Group’s Wealthiness and Prosperity Holding, which will be required to make an unconditional mandatory cash offer for all the issued shares.

Shares of Bright Smart jumped as much as 63.9% to a record on Monday after the Ant news.

Launched by Alibaba (NYSE:BABA) Group founder Jack Ma and 33% controlled by China’s biggest e-commerce company, Ant operates China’s ubiquitous mobile payment app Alipay.

The investment came after Ant in September last year refinanced its $6.5 billion credit line, with part of the capital planned for bolstering its overseas operations, Bloomberg reported at the time, citing sources.

Chinese authorities pulled the plug on Ant’s $37 billion IPO in Shanghai and Hong Kong in 2020 and cracked down on Ma’s business empire shortly after he gave a speech in Shanghai in October that year accusing financial watchdogs of stifling innovation.

That subsequently led to a forced restructuring of Ant and a nearly $1 billion fine by Chinese regulators. Ant is still in the process of securing a financial holding company license, which, once obtained, is likely to facilitate the revival of its IPO goal.

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Bright Smart’s stock, whose trading was halted on April 23, touched HK$5, the highest since its debut in August 2010. The benchmark Hang Seng Index fell 0.5% on Monday.

Ant intends to maintain Bright Smart’s stock exchange listing, according to the joint statement.

($1 = 7.7578 Hong Kong dollars)

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