* Haitong to buy 53 pct of Taifook for HK$1.82 billion
* Haitong to make offer for all of Taifook at HK$4.88/shr
* General offer represents 21 pct premium for Taifook
* Taifook up 0.8 pct to HK$4.81
* Analysts sees more deals as Chinese brokerages expand (Adds analysts comment, stock price)
By Samuel Shen and Donny Kwok
SHANGHAI/HONG KONG, Nov 23 (Reuters) - Haitong Securities 600837.SS, China's second-biggest listed brokerage by market value, will buy 53 percent of Hong Kong's Taifook Securities 0665.HK for $235 million, in a deal that may trigger a wave of purchases by Chinese brokers looking to expand abroad.
“It reflects that a trend of mergers between mainland and local brokerages is forming, and that may expand to include Taiwanese firms as restrictions ease,” said Ben Kwong, chief operating officer at KGI Asia in Hong Kong.
Haitong’s announcement follows a week-long suspension of trade in the two companies’ shares after a source with direct knowledge of the situation told Reuters that Haitong planned to buy a stake in Taifook. [ID:nSHA42428]
Haitong said a Hong Kong subsidiary would pay cash for 373.43 million Taifook shares currently held by NWS Holdings 0659.HK, which owns 62 percent of the Hong Kong brokerage. It would then make an offer for all the remaining shares at HK$4.88 per share.
The offer represents a 21.1 percent premium to Taifook’s HK$4.03 share price before NWS announced it was in talks to sell some or all of its stake.
Taifook shares initially jumped when trading resumed on Monday, gaining more than 7 percent, but later pared those gains to trade 0.84 percent higher at HK$4.81 in the early afternoon.
NWS rose 1.5 percent.
“Its a win-win deal for both firms, as Haitong can now offer more overseas investment products to existing clients in the mainland, one step towards fulfilling its global reach ambition through the platform in Hong Kong,” said William Lo, analyst at Ample Finance Group.
“With stronger backing (from Haitong), Taifook can be in a better position to compete with foreign brokers in areas such as IPOs, securities trading and asset management,” Lo said.
NWS, a unit of New World Development 0017.HK, said the deal would allow it to consolidate its service-related businesses and refocus its resources on stable growth areas such as infrastructure.
Haitong shares will resume trading on Wednesday.
Haitong has said it wanted to buy other financial services firms to broaden its business, while using Hong Kong as a base for expansion.
Analysts said they expect more similar deals to emerge in the future with lower-valued Hong Kong brokers as likely targets.
Shares of Get Nice 0064.HK rose 2 percent and Shenyin Wanguo 0218.HK gained 0.5 percent, while Sun Hung Kai and Co 0086.HK and Dah Sing Banking Corp 2356.HK were flat. The main Hang Seng Index .HSI was up 0.6 percent. ($1=7.750 Hong Kong Dollar) (Additional reporting by Edmund Klamann; Editing by Doug Young and Ian Geoghegan) ((firstname.lastname@example.org; +86 21 6104 1799; Reuters Messaging: email@example.com)) ((If you have a query or comment on this story, send an email to firstname.lastname@example.org))