(Bloomberg) -- Value Partners Group Ltd. rose as much as 15% in Hong Kong trading as GF Securities Co. is planning on buying a 20% stake in the asset manager as part of a push by the mainland Chinese brokerage to expand overseas.
The shares rose HK$0.33 to HK$2.55 as of 9:20 a.m. in Hong Kong.
The Guangzhou-based brokerage is nearing an agreement to buy a stake from Cheah Cheng Hye and V-Nee Yeh, the founders of Value Partners, for about HK$1.1 billion ($141 million), a person familiar with the matter said late Monday, asking not to be identified. The deal is subject to board approval later this week, the person said.
Cheah and Yeh currently hold 25% and 16% of Value Partners, respectively, and would both retain a smaller share in the Hong Kong-based and listed firm. They founded the boutique fund manager in 1993 and it now has offices across China as well as in Kuala Lumpur, Singapore and London. It posted a loss of HK$544 million last year as its assets under management tumbled to $6.1 billion from $10 billion in 2021.
Value Partners confirmed in an exchange filing that talks on the stake sale are ongoing with a bidder looking to purchase less than 30% of the shares. A deal will not proceed if it triggers a rule to make a mandatory offer, according to the statement.
The deal is being made through GF Holdings (Hong Kong) Corp., a subsidiary of GF Securities, one of the people said. The purchase price represents more than a 35% premium to the last close of Value Partners, which has tumbled over 35% since late January.
GF Holdings is trying expand its presence outside of China after restructuring last year as it hired Charles Lin, a former CLSA Ltd. and Vanguard executive, to steer the business.
The Value Partners founders had tried to sell a stake to HNA Group Inc. in 2017 in a deal that later fell through.
(Adds details on confirmation in talks in fourth paragraph)
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