Hong Kong's Reorient jumps in value after Jack Ma-backed fund buys control

HONG KONG - Reorient Group Ltd, a Hong Kong-listed financial services provider, nearly tripled in value on Monday after a fund backed by Chinese billionaire Jack Ma agreed to invest HK$2.7 billion (S$470 million, US$348 million) for a controlling stake.

Yunfeng Financial Holdings Ltd (YFHL), 40 per cent owned by Alibaba Group Holding Ltd founder Ma, will buy 56 per cent of Reorient at HK$2.00 a share, Reorient said in a statement on Friday.

The price represents a 77 per cent discount to Reorient's last price on April 20, when trading in the shares was suspended pending an announcement. Trading resumed on Monday, with the price jumping as much as 178 per cent to HK$25.00.

In all, Reorient said it is raising HK$3.9 billion by issuing new shares. It plans to use the net proceeds "to support the development of existing financial services businesses and as general working capital," the company said in the statement.

After completing the latest transaction, YFHL would own 56 per cent of Reorient's expanded capital. Four new investors would hold 25 per cent and the rest would be with current shareholders.

At 0435 GMT, the shares were trading at HK$23.50, up 161 per cent, while the benchmark Hang Seng Index was up 0.7 per cent. "This is a strategic investment for us, very much in line with our endeavour in the financial technology space as well as in extending our global reach," said YFHL Chairman David Yu in the statement.

"We look forward to the joint exploration with Reorient in areas such as Internet finance."