Ant Group, the fintech affiliate of Alibaba Group, announced Friday it is acquiring a 50.55% controlling stake in Bright Smart Securities & Commodities Group for HK$2.81 billion ($362 million), marking its first direct entry into the brokerage business.
The transaction, disclosed in a joint statement, involves Ant purchasing 857.98 million shares from Bright Smart chairman Yip Mow Lum at HK$3.28 per share through its subsidiary, Wealthiness and Prosperity Holding Ltd. Ant Group will be required to make an unconditional mandatory cash offer for all outstanding shares following the acquisition.
Shares of Bright Smart nearly doubled in price on Monday after the announcement, soaring to a record high of HK$6 before closing at HK$5.55, an 82% increase from its last traded price before a trading halt on April 23. The one-day surge marked the largest percentage gain since the company's listing in August 2010, while Hong Kong's benchmark Hang Seng Index remained flat.
Ant Group said it plans to maintain Bright Smart's stock exchange listing and does not intend to make significant changes to the company's operations. However, according to an HKEX filing, the offeror may reduce the final dividend following the offer to strengthen infrastructure, upgrade technology, and improve operational efficiency.
Morgan Stanley Asia Limited is acting as Ant's financial advisor for the transaction. Trading in Bright Smart shares resumed at 9 a.m. Monday following the announcement.
Ant Group, founded by billionaire Jack Ma and 33% owned by Alibaba, operates China's dominant mobile payments platform, Alipay. The move comes as Ant continues to expand internationally after refinancing a $6.5 billion credit facility last September, with part of the capital earmarked for overseas growth.
