After Guotai Haitong Securities (2611 HK) merged early last year (GJS/Haitong Merger Musings), becoming China’s largest brokerage, it has been streamlining/cleaning house with its majority-held subsidiaries.
It is currently seeking to take 73.92%-held Guotai Junan (1788 HK) private. Now Shanghai SASAC-backed Shanghai International Group (SIG) is proposing to take control of 85%-held Haitong Unitrust (1905 HK).
The proposal from SIG, Guotai Haitong’s largest shareholder, is via a Partial Offer. Terms are fair. The key risk, as it applies to PRC reg approvals, is one of timing.
The Trade:
Terms are very attractive.
The risk to the trade is one of timing.
This is a long-dated deal.
No urgency to get committed/filled.
I can see this opening strong at the bell - ~HK$1.85+/share.