(Yicai Global) Jan. 15 -- Shares in the Postal Savings Bank of China skyrocketed today on the news that US venture capital firm Himalaya Capital has bought HKD4.2 billion (USD541.7 million) of the company’s Hong Kong-listed stock, the Securities Times reported today.
PSBC's Shanghai-listed shares [SHA:601658] shot up by the exchange-imposed limit of 10 percent to CNY5.52 (USD0.9), before closing up 8.37 percent at CNY5.44. The bank's Hong Kong stock [HKG:1658] closed up 10 percent at HKD5.27 (USD0.68). Earlier in the day it had soared as much as 17.5 percent to HKD5.63.
Seattle-based Himalaya Capital bought almost one billion shares in PSBC, amounting to one fifth of the lender’s total stock, in the fourth quarter at an estimated average price of HKD4.22 (USD0.54) each, the report said, referring to recent data from the Hong Kong stock exchange. This amounts to an outlay of approximately HKD4.2 billion, it added.
In third-quarter data released on Nov. 13 last year, there had been no mention of Himalaya.
The business acumen of Li Lu, the Chinese-American founder and chairman of Himalaya, is renowned. Li has been credited by US tycoon Warren Buffett as one of the main sources of his wealth. In 2002, Li tipped off Buffett to buy shares in new energy vehicle maker BYD. Buffett first bought into the Chinese firm in 2008 for HKD8 per share. Buffett now holds 225 million shares. Based on the closing price of HKD249 (USD32) yesterday, Buffett has had a more than 30-fold return on investment and has earned roughly USD50 billion.
Beijing-based PSBC said earlier this month that it is planning to raise CNY30 billion (USD4.6 billion) by offering 5.4 billion shares to its majority shareholder China Post Group. The stock is expected to be offered at CNY5.55 each (USD0.86), a 16 percent premium on the stock’s closing price in Shanghai on Jan. 8 and 50.4 percent higher than the Hong Kong finishing price that day. The private placement, which has been approved by China’s regulators, will see China Post’s stake increase to 67.3 percent from 65.24 percent.
Editor: Kim Taylor