Shares of Hong Kong-based investment bank Reorient Group Ltd. jumped a record 152 percent after a private-equity fund backed by e-commerce billionaire Jack Ma agreed to invest in the company.
The stock closed at HK$22.65 in Hong Kong, the highest level since 2007, after its biggest one-day gain, according to Bloomberg data going back to 1990.
Jade Passion Ltd., controlled by Yunfeng Financial Holdings Ltd., will buy 1.34 billion new shares in Reorient for HK$2.68 billion ($346 million), or HK$2 each, according to a Reorient statement to the Hong Kong stock exchange on Friday, giving it a 56 percent stake. It’s seeking exemption from a rule requiring it to make a mandatory buyout offer for Reorient.
“This is a strategic investment for us, very much in line with our endeavor in the financial-technology space as well as in extending our global reach,” David Yu, Yunfeng’s chairman and co-founder, said on Friday. “We look forward to the joint exploration with Reorient in areas such as Internet finance.” Yu holds 60 percent of Yunfeng and Ma 40 percent, according to the statement.
Ma, chairman and founder of Alibaba Group Holding Ltd., China’s biggest e-commerce company, is boosting his investments in financial services. He controls Zhejiang Ant Small & Micro Financial Services Group Co., which owns Alipay, China’s biggest online payment system, and operates a bank, a money-market fund and a credit-scoring service.
Among Yunfeng’s partners in Jade Passion is a company owned by Huang Youlong, who is the husband of Chinese actress Zhao Wei and an investor in Alibaba Pictures Group Ltd., Alibaba Group’s Hong Kong-listed entertainment arm.
Reorient said it will sell a total of 1.94 billion new shares, including those Yunfeng’s group is buying, raising HK$3.89 billion. It will use the money to support development of financial services operations and as general working capital.
All of Reorient’s executive directors except Johnson Ko and Brett McGonegal will resign on completion of the share sale, according to the filing.
Reorient’s shares were suspended since April 21.