CITIC at 7-month high

By Chia-Peck Wong  |   2008-6-12  |     NEWSPAPER EDITION

CITIC International Financial Holdings, part of China's biggest state-owned investment firm, rose to the highest in seven months in Hong Kong trading after its parent offered to buy out other shareholders.

CITIC International climbed 8.3 percent to HK$6.17, the highest since November, on its first day of trading after being suspended on June 3. Stockholders will receive one new China CITIC Bank Corp share and HK$1.46 in cash for every share they own, CITIC International said, valuing the stock at HK$6.90, or a 21-percent premium over its previous closing price.

CITIC Group is consolidating its financial operations with the HK$12.3-billion (US$1.57 billion) privatization plan.

It owns 55 percent of CITIC International, an investment holding company that also owns a bank and two asset management firms in Hong Kong.

The offer values CITIC International at 1.6 times book value, after adjusting for bridge loans and excluding a 15-percent stake in CITIC Bank, according to CITIC Group. The parent company owns 62 percent of CITIC Bank.

Chang Zhenming, CITIC Group's vice chairman, described the offer as "reasonable."