China Finance Online (JRJC) has entered into definitive agreements to acquire 85% equity interest in Daily Growth Investment, a licensed securities brokerage firm incorporated in Hong Kong.
Under the definitive agreements, CFO will pay approximately US$3 million in exchange for 85% of the equity of Daily Growth Investment, and the exact payment will be determined on the basis of the net asset value as at the date of completion. CFO has the right to acquire the remaining 15% of equity of Daily Growth Investment within 5 years from the completion date.
"Under the pilot program announced in August 2007, the Chinese government will allow individual investors to directly trade Hong Kong-listed securities by opening accounts at Bank of China's branch in Tianjin, a northern city near Beijing, and the bank's Hong Kong brokerage arm, BOCI Securities Ltd. We believe that this trial investment program may signal a new stage of financial liberalizing for local retail investors by allowing them to access Hong Kong- listed securities as well as access to other international stock markets in the long term," Zhiwei Zhao, CEO of China Finance Online, said.
The completion of this transaction is conditional upon a number of benchmarks.