synopsis

Ant Group's Wealthiness and Prosperity Holding will purchase 857.98 million shares of Bright Smart Securities, representing approximately 50.55% of the total issued shares, for HK$3.28 per share.

E-commerce giant Alibaba Group’s (BABA) affiliate Ant Group has entered the brokerage business through the acquisition of a 50.55% controlling stake in Bright Smart Securities & Commodities Group for HK$2.81 billion ($362 million).

The news of the acquisition pushed the Hong-Kong listed shares of Bright Smart Securities soaring over 81% on Monday afternoon.

According to a Reuters report, Bright Smart chairman Yip Mow Lum is offloading 857.98 million shares of the company at HK$3.28 apiece to Ant Group's Wealthiness and Prosperity Holding.

The Ant Group company will then have to make an unconditional mandatory cash offer for all the issued shares, the report stated.

On April 25, Ant Group paid a deposit of HK$281.4 million, representing 10% of the total consideration of the sale to Bright Smart.

The company said that it intends to maintain Bright Smart's stock exchange listing following the closing of the deal.

Founded by billionaire Jack Ma, fintech giant Ant is 33% controlled by Alibaba. The group owns the mobile payment platform Alipay.

Ant was planning an IPO in Shanghai in 2020, but the Shanghai Stock Exchange suspended it due to regulatory concerns. The company subsequently dropped its Hong Kong listing as well.

Chinese President Xi Jinping personally decided to halt the initial public offering of Ant, The Wall Street Journal had reported. Ma had criticised the Chinese government’s tight financial regulation for holding back technology development at an event in Shanghai before the IPO.  

In July 2023, Ant Group was fined RMB 7.12 billion (approximately $98 million) by the People’s Bank of China for non-compliance with regulations, including anti-money laundering requirements.

The company was forced to restructure following the scrapping of the IPO. In September, the company refinanced its $6.5 billion offshore credit line, which was established in 2019, to expand its reach beyond China and offset slowing growth in the country, according to a Bloomberg report.

NYSE-listed shares of Alibaba traded over 2% lower on Monday afternoon.

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