Alibaba acquires 4.84 per cent stake in mainland China bank CICC to become third-largest shareholder after Tencent
- Company acquired 117 million shares at an average price of HK$15.5 per share on February 14
- Tencent took up 4.95 per cent stake in CICC in September 2017
Alibaba Group Holding, mainland China’s biggest e-commerce platform, has acquired a 4.84 per cent stake in investment bank China International Capital Corporation to become its third-largest shareholder, according to a filing of interest disclosure by the bank to the Hong Kong stock exchange on Tuesday.
The Hangzhou-based company now owns 202.8 million shares – 4.84 per cent of CICC’s total shares and 11.74 per cent of its total issued shares in the Hong Kong market – according to the filing. According to the filing, Alibaba acquired 117 million shares at an average price of HK$15.5 per share on February 14. The company had previously acquired 85.8 million shares at an undisclosed price. The value of the whole deal has not been disclosed.
“CICC is one of the top investment banks in China. Alibaba’s investment in CICC will strengthen our long-time partnership and better serve our customers with innovative product and services,” said an Alibaba spokesperson.
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A CICC spokesperson said: “CICC is committed to enhancing the value of the company and gaining market recognition. We welcome long-term investors at home and abroad to become shareholders of the company. We will work with IT leaders with an open manner and will actively explore the application of information technology in the financial sector. We will provide better services to our customers and create better returns for shareholders.”
CICC went public in Hong Kong in November 2015. Founded in 1995, it was China’s first joint venture investment bank, a tie-up between state-owned China Construction Bank and Morgan Stanley. The latter sold its stake in CICC in 2010.
Wang Qishan, now a vice-president of China and considered the right-hand man to President Xi Jinping, acted as CICC’s first chairman.
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The investment bank completed its deal with Tencent as early as September 20, 2017, with the latter subscribing to about 207.5 million new H shares of CICC. Tencent’s stake represents 12.01 per cent of the bank’s total issued H shares and 4.95 per cent of its total issued capital.
The bank’s share price has surged by about 23 per cent from the price offered to Tencent. The stock closed 2.6 per cent higher on Tuesday at HK$16.92.
Central Huijin Investment, part of mainland China’s sovereign wealth fund, owns a controlling 55.68 per cent stake in CICC, according to the company’s third-quarter results filing.
Revenue at the bank increased by 51.5 per cent year on year for the first half of 2018, to 8.8 billion yuan (US$1.3 billion), according to its interim report. Its net profit grew by 46.8 per cent to 1.6 billion yuan.
