[HONG KONG] China's Everbright Securities has agreed to buy Hong Kong conglomerate Sun Hung Kai & Co Ltd's 70 percent stake in its brokerage and wealth management service unit for HK$4.1 billion (US$529 million), the two companies said on Monday.
The unit, Sun Hung Kai Financial Group Ltd (SHKFGL), is one of the largest brokerage and wealth management service providers in Hong Kong, Sun Hung Kai said. It also has offices in Macau and China.
"The SHK Board considers the transaction to be in the interests of its shareholders, realising a considerable gain and generating cash inflow," Sun Hung Kai said in the statement to the Hong Kong stock exchange.
Sun Hung Kai expects a gain of HK$2.8 billion after the transaction, the statement said.
Everbright Securities Co Ltd will promote a listing of SHKFGL or an entity within three years after the transaction, the statement said.
SHKFGL posted an after-tax profit of HK$174.3 million for the year ended on Dec 31 2014 with unaudited consolidated net asset value at HK$3.3 billion. It recorded an after-tax loss of HK$38.5 million in 2013.
Trading of shares in Sun Hung Kai and its shareholders Allied Group Ltd and Allied Properties HK Ltd will resume on Tuesday after they were suspended on Monday.
Trading in Everbright Securities will also resume on Tuesday.