(Yicai Global) May 29 -- Tianfeng Securities will buy a stake in Hengtai Securities once valued at CNY9 billion (USD1.3 billion) though the acquisition price has not been revealed.
TF will take a 29.99 percent stake in the firm, the Wuhan-based investment management services provider said in a statement adding that it will help Hengtai to optimize resource allocation while supplementing and adjusting assets to enhance competitiveness and profitability.
TF will become Hengtai's single largest shareholder when the deal closes.
Hengtai's nine shareholders planned to sell their 29.94 percent stake to Citic Guo'an Group for CNY9 billion and both sides penned a framework agreement, the firm announced in January last year before the deal was abandoned in April the same year.
TF and Hengtai are supplementary to each other in terms of business network positioning, according to an industry analyst, adding that TF has 98 business outlets mostly in south and east China while Hengtai has 114 mainly in North China.
Founded in 1992 in Hohhot, Inner Mongolia, Hengtai posted CNY914 million (USD132.2 million) in operating revenue and a CNY655 million net loss last year and reported CNY1.3 billion in revenues and CNY627 million in net profit in the first quarter.
TF went public in October and achieved CNY3.3 billion in revenue and CNY303 million in net profit last year.
TF's stock price [SHA:601162] dropped 1 percent to CNY9.1 (USD1.32) at the opening today, while the Shanghai Composite Index opened down 0.5 percent overall.
Editor: William Clegg