Sun Hung Kai & Co, one of Hong Kong's largest local brokerages, plans to buy a 51 per cent stake in United Asia Finance for between $3 billion and $4 billion from parent Allied Group, sources say. Sources said Sun Hung Kai owned 7 per cent of United Asia Finance and the transaction would boost its holding to 58 per cent. Funding for the acquisition would come from a combination of equity and debt financing, sources said, adding Sun Hung Kai planned to raise $1.75 billion by offering 250 million shares at $7 each. 3V Capital is arranging the placement. Sun Hung Kai would also issue bonds to Allied Group to pay for the rest of the acquisition amount, sources said. Trading of Sun Hung Kai shares was suspended yesterday, pending a share placement announcement. Its parents Allied Properties and Allied Group were also suspended from trading. Sun Hung Kai's share placement would come in the wake of a soaring share price. The stock has rallied 265.12 per cent so far this year and the placing price represented a 9.73 per cent discount on its closing price of $7.755 on Thursday. Just a week ago, Sun Hung Kai announced that the company and Allied Group had entered into preliminary discussions regarding the possible acquisition of United Asia Finance. Sources said there would be substantial synergy for Sun Hung Kai in acquiring United Asia Finance, which is mainly engaged in consumer finance in Hong Kong. Sun Hung Kai is an integrated financial services group which offers a wide range of financial services, including securities broking, foreign exchange, bullion, commodities and futures broking and money lending. A year ago, Allied Group bought a 74.8 per cent stake in Hong Kong Building and Loan Agency from Lippo China Resources for $185 million and made a general offer for the remaining shares. United Asia Finance was used as the takeover vehicle at that time. Allied Properties, which is controlled by Allied Group, owns a 74.99 per cent stake in Sun Hung Kai.