Guolian Securities (HKG:1456) agreed to merge its wholly owned subsidiary Minsheng Futures into Guolian Futures through a share exchange, under which Minsheng Securities will receive a 52.57% stake in the enlarged futures company, according to a Wednesday Hong Kong bourse filing.
Under the agreement, Minsheng Securities will transfer its entire 100% interest in Minsheng Futures to Guolian Futures in exchange for 498.7 million newly issued shares in Guolian Futures. The preliminary valuation puts Minsheng Futures at 1.43 billion yuan and Guolian Futures at 1.29 billionyuan, with an exchange price of 2.8739 yuan per share.
Guolian Futures will remain as the surviving entity and assume Minsheng Futures' assets, liabilities, businesses, employees and other obligations. Its controlling shareholder will change from Guolian Group to Minsheng Securities, and Guolian Securities will consolidate Guolian Futures into its financial statements.
The transaction is intended to eliminate horizontal competition between the two futures businesses.