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

By Donny Kwok and Selena Li

HONG KONG (Reuters) - Ant Group, an affiliate of China’s e-commerce giant Alibaba (NYSE:BABA) Group, is buying a $362 million controlling stake in Bright Smart Securities & Commodities Group, marking its first acquisition of a securities brokerage licence.

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

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 nearly doubled in price to a record high of HK$6 on the Ant news before closing at HK$5.55 on Monday, or 82% higher than the last traded share price of HK$3.05 before trading was halted on April 23.

It was the biggest one-day percentage rise since the company’s listing in August 2010.

The benchmark Hang Seng Index was flat on Monday.

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

Ant was founded by billionaire Jack Ma and is 33% controlled by Alibaba. It operates China’s ubiquitous mobile payments app Alipay.

The investment comes 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 soon after his speech in Shanghai in October that year accusing financial watchdogs of stifling innovation.

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

($1 = 7.7578 Hong Kong dollars)

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