Guotai Junan International shares soared after trading resumed, jumping over 36 percent to HK$2.835 by the midday break. Earlier, the company and its controlling shareholder Guotai Haitong jointly announced that Guotai Haitong Financial Holdings intends to take Guotai Junan International private at HK$3 per share, representing a premium of about 44.2 percent over the last closing price of HK$2.08 before suspension. After resumption, the stock price moved closer to the offer price, and as long as it remains below HK$3, there is an arbitrage opportunity. The key to realizing that arbitrage is whether the privatization can be completed smoothly. The relevant proposal will be submitted for shareholder approval after obtaining clearance from authorities including the National Development and Reform Commission and the Shanghai State-owned Assets Supervision and Administration Commission, and will proceed with court processes in Hong Kong.
Guotai Junan International Holdings LtdPrivatization offer at HK$3 per share, a 44.2% premium over last close, driving shares up 36%.
Guotai Junan Securities Co Ltd