On the evening of October 9, Guotai Junan announced that the company and Haitong Securities planned to carry out a major asset restructuring through a share exchange and absorption merger, and raise matching funds. The transaction includes the issuance of shares to all A and H share exchange shareholders of Haitong Securities. The company's A shares will be suspended from September 6, 2024, and the relevant audit work has not yet been completed, and the general meeting of shareholders will not be held for the time being. The company's shares will resume trading on October 10, 2024. The transaction plan is subject to a number of approvals and approvals, and there are uncertainties, reminding investors to be aware of the risks.
Image source: Daily Economic News data map
According to the announcement, Guotai Junan's A-share exchange price is 13.83 yuan per share, and Haitong Securities' A-share exchange price is 8.57 yuan per share. According to the above formula, the share exchange ratio between Haitong Securities and Guotai Junan is 1:0.62, that is, every 1 A share of Haitong Securities can be exchanged for 0.62 A shares of Guotai Junan, and every 1 H share of Haitong Securities can be exchanged for 0.62 H shares of Guotai Junan. Guotai Junan's H-share exchange price is HK$7.73 per share, and Haitong Securities' H-share exchange price is HK$4.79 per share.
On the same day, Haitong Securities announced that the merger will adopt the method of Guotai Junan's share exchange and absorption of Haitong Securities, that is, Guotai Junan will issue Guotai Junan A shares to all A-share exchange shareholders of Haitong Securities, and Guotai Junan H shares will be issued to all H-share exchange shareholders of Haitong Securities, and the A shares to be issued will apply for listing and circulation on the Shanghai Stock Exchange, and the H shares to be issued will be applied for listing and circulation on the Hong Kong Stock Exchange, and the A shares and H shares of Haitong Securities will be cancelled accordingly, and Haitong Securities will also terminate the listing; Since the closing date of the merger, the surviving company will inherit and undertake all the assets, liabilities, business, personnel, contracts, qualifications and all other rights and obligations of Haitong Securities; After the closing date, Guotai Junan will go through the industrial and commercial change registration procedures related to the company name and registered capital, and Haitong Securities will cancel its legal personality. Trading in the Company's A-shares will resume from the market open on October 10, 2024.
Image source: Photo by reporter Kong Zesi
After the merger, the company will adopt a new company name, and take a series of measures to establish a new corporate governance structure, management structure, development strategy and corporate culture in accordance with the applicable laws and regulations at that time and the specific circumstances of this merger. Trading in the Company's A-shares will resume from the market open on October 10, 2024.
On the evening of September 5, Guotai Junan and Haitong Securities both announced that Guotai Junan and Haitong Securities were planning to absorb and merge Haitong Securities and issue shares to raise matching funds. Trading in the two companies will be suspended from the market open on Friday, September 6.
According to public information, Guotai Junan Securities was established in August 1999 by Guotai Securities and Junan Securities, both founded in 1992, through a new merger, capital increase and share expansion, headquartered in Shanghai, and the actual controller is Shanghai International Group Co., Ltd. Guotai Junan Securities was listed on the A-share market in 2015 and the H-share market in 2017, and is an A+H-share listed company.
Guotai Junan Securities has always maintained a strong comprehensive competitiveness, and in recent years, its core financial indicators have ranked first in the industry, and it has been awarded the highest regulatory rating of Class A AA by the China Securities Regulatory Commission for 17 consecutive years.
Haitong Securities was established in 1988 by Bank of Communications, headquartered in Shanghai, and its largest shareholder is Shanghai Guosheng (Group) Co., Ltd., which has no controlling shareholder or actual controller. The company was listed on the A-share market in 2007 and the H-share listed company in 2012, and is an A+H-share listed company.
Haitong Securities is one of the earliest and most comprehensive securities companies in China, with an integrated business platform, a huge marketing network and a strong customer base.
According to the China Securities Journal, it is worth noting that the merger of Guotai Junan and Haitong Securities is the first merger and reorganization of the head brokerage since the implementation of the new "National Nine Articles", and it is also the largest A+H bilateral market absorption merger in the history of China's capital market and the largest integration case of A+H listed brokerage. According to the 2023 data, the total assets and net assets attributable to the parent of the new institution after the merger will reach 1.68 trillion yuan and 330 billion yuan respectively, both of which are in the first place in the industry, and the "super carrier" of the securities industry is about to emerge.
On September 10, Guotai Junan held the 2024 semi-annual results briefing online. In response to the merger of Haitong Securities, Zhu Jian, chairman of Guotai Junan, said in response to investors' questions that the restructuring aims to respond to the national strategy and promote the construction of a first-class investment bank, which is in line with the strategic development direction of the two companies, which will help both parties complement each other's advantages, enhance their core functions, enhance the level of financial services in the real economy, and contribute to further optimizing the layout of Shanghai's financial state-owned assets and promoting the high-quality development of the securities industry.
Source: National Business Daily, public news, China Securities Journal
Editor: Xiaoya