(Yicai Global) June 18 -- Tianfeng Securities plans to pay up to CNY4.5 billion (USD650 million) to procure a 30 percent stake in Hengtai Securities and become its largest shareholder.

The Shanghai-listed broker is prepared to pay CNY5.76 (83 US cents) a share, it said in a statement yesterday, adding that the deal fits its expansion plans to become more competitive.

Shares in Hengtai [HKG:1476] closed up nearly 16 percent yesterday at HKD4 (51 US cents) but are not trading today. Tianfeng's share price [SHA:601162] was up 1.52 percent at CNY9.99 as of 10.47 a.m.

Hengtai, known as Hengtou in Hong Kong, had initially planned to sell a near 30 percent stake to Citic Guoan Group for twice as much as TF is paying, but the transaction eventually fell through.

The target, which runs 144 branches mostly in north and northeastern China, had assets worth CNY30 billion at the end of last year but lost CNY673 million (USD97 million) on revenue of CNY980 million, blaming the volatility of China's securities market.

TF on the other hand tripled its net last month to buck a sector-wide trend of poor performance. It listed in October and racked up CNY1 billion in revenue in the first quarter of this year, up 62 percent from the same period in 2018.

Editor: James Boynton