Shanghai Urban nods on Haitong's backdoor listing proposal
(Shanghai Daily)Updated: 2007-01-25 16:04 Haitong Securities Co's plan to take over Shanghai Urban Agro-Business Co via a back-door listing has been approved by the latter's shareholders, paving the way for Haitong to become the fourth mainland-traded broker.
Shareholders at Shanghai Urban approved a proposal under which they will receive one share of Haitong for every 0.347 share they own in the listed company, it said in a filing to the Shanghai Stock Exchange yesterday.
The swap ratio was calculated based on 2.01 yuan (26 US cents) for a piece of Haitong stock and 5.80 yuan per share for Shanghai Urban as of October 13 when the deal was clinched.
Shanghai-based Haitong, long eying a public offer to raise capital, had previously been in talks to buy control of Shenzhen-listed Liulu Industrial Co, a Liaoning Province unit of PetroChina Ltd.
But it later shifted its focus to Shanghai Urban after the Shanghai government wanted Haitong to remain based in the city after its listing, sources said.
China's securities watchdog is encouraging healthier brokers to swap shares with existing listed companies to go public as part of efforts to help them add fund-raising channels and bolster corporate governance.
There are now two listed brokers - CITIC Securities Co and Hong Yuan Securities Co - in the country. GF Securities Co is expected to take over Shenzhen-traded Yan Bian Highway Construction Co next month.
Other brokerages including Sinolink Securities Co and Northeast Securities Co have already announced plans for so-called back-door listings.
Changjiang Securities Co, originally studying an initial public offering, also said yesterday it will acquire Shenzhen-traded Shijiazhuang Refining & Chemical Co for a listing.
Shares of Shanghai Urban jumped by the 10 percent daily cap to 12.43 yuan yesterday, its first trading session since January 15 when they were suspended from trading pending the shareholders' decision.
"The surge showed optimism over Haitong's long-term prospects amid a domestic stock-market rally," said Liu Yu, an Orient Securities Co trader. "The broker might seek additional stock sales after the takeover."
(For more biz stories, please visit Industry Updates)
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