Hong Kong buyout leaves property woes clear as mud

Haitong International Securities

10/10/2023 02:41

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Chan Ka Sing
       HONG KONG, Oct 10 (Reuters Breakingviews) - Haitong
Securities offered a 114% premium for shares it doesn’t already
own in its ailing subsidiary. At some 60% of book value, that
could have set a benchmark for other brokerages laid low by
their China real estate holdings. The lack of transparency on
assets prevents that.
        
    Full view will be published shortly.
    
    CONTEXT NEWS
    Haitong Securities has offered HK$3.5 billion ($443 million)
for the 26.6% stake in its Hong Kong-listed unit Haitong
International it doesn’t already own, the latter said on Oct. 6.
At HK$1.52 per share, the deal values the subsidiary at $1.7
billion. It represents a 114% premium over the Hong Kong-listed
firm’s last closing price, and a 40% discount to its book value,
excluding perpetual securities, at the end of June. 
    Haitong International reported a HK$781 million net loss for
the six months to the end of June. The brokerage also lost
HK$6.6 billion in 2022 in relation to “investment in equity and
debt securities”.

 (Editing by Una Galani and Thomas Shum)
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