HK Stock Market Move | GUOTAI JUNAN I (01788) resumed trading with a jump of over 37%, receiving a 44% premium privatization proposal from Guotai Haitong.

GUOTAI JUNAN I (01788) resumed trading with a high opening of over 37%. As of the time of this report, it has risen by 37.02%, priced at HKD 2.85, with a trading volume of HKD 60.62 million. In terms of news, GUOTAI JUNAN I and its majority shareholder Guotai Haitong jointly announced that Guotai Haitong, as the offeror, proposes to privatize GUOTAI JUNAN I and delist it, with a cancellation price of HKD 3 per share, representing a premium of approximately 44.23% over the last closing price of HKD 2.08 before the suspension. Assuming that stock options and all convertible bonds are not exercised, the cash amount required for privatization will be about HKD 9.86 billion. If stock options and all convertible bonds are exercised and converted into shares, the cash required for privatization will increase to a maximum of approximately HKD 12.6 billion. Guotai Haitong has indicated that the cancellation price will not be adjusted, and there is no right to reserve such actions. The announcement states that GUOTAI JUNAN I's stock price has dropped by 21.2% since the beginning of this year, while the cancellation price represents a premium of about 44.2% over the closing price, equivalent to 1.8 times the implied price-to-book ratio from last year, providing shareholders with a very attractive opportunity to realize investment returns at a valuation multiple that is higher than the current stock price and presents an appealing price-to-book ratio. Guotai Haitong noted that the proposed privatization aims to enhance synergies among subsidiaries, facilitate the deployment of financial and customer resources in domestic and international markets, and accelerate the transformation into an investment bank with international competitiveness and market influence.