China's Ant Group says Bright Smart deal on track following report of delay

BEIJING/HONG KONG (Reuters) -China’s Ant Group said relevant procedures regarding its acquisition of Bright Smart Securities & Commodities Group are moving forward as planned, in response to a report that said the deal may face higher regulatory scrutiny and could be delayed.

 

Shares of Bright Smart dropped as much as 26.2% to HK$10.26 on Friday after the Wall Street Journal reported on Thursday that the deal could be delayed as more mainland Chinese regulators contemplate reviewing the proposal.

 

Hong Kong-based Bright Smart also said in a filing on Friday that it had noticed media reports suggesting a possible delay of the acquisition and that the relevant procedures with regard to the deal with the relevant authorities were progressing as planned.

 

Ant agreed to buy a 50.55% controlling stake in Bright Smart Securities for HK$2.81 billion ($359.37 million), according to a filing by the brokerage in April.

 

Ant was founded by billionaire Jack Ma and is 33% controlled by Alibaba. It operates China’s ubiquitous mobile payments app Alipay.

 

Chinese authorities pulled the plug on Ant’s $37 billion IPO in Shanghai and Hong Kong in 2020 and cracked down on Ma’s business empire soon after a speech in Shanghai in October that year accusing financial watchdogs of stifling innovation.

 

That subsequently led to a forced restructuring of Ant and a nearly $1 billion fine by Chinese regulators. Ant is in the process of securing a financial holding company licence, which, once obtained, could facilitate the revival of its IPO goal.

 

($1 = 7.8192 Hong Kong dollars)

 

(Reporting by Ziyi Tang, Ryan Woo and Donny Kwok)