(Yicai Global) March 15 -- Shares of Guolian Securities jumped after its parent company spent CNY9.1 billion (USD1.3 billion) to beat out two competitors in a fierce bidding war for control of Minsheng Securities.

Guolian Securities [SHA: 601456] closed up 5.8 percent at CNY11.01 (USD1.60) a share today, having surged nearly 9 percent at one point.

Guolian Group, backed by the local government of Wuxi, where it is headquartered, acquired 3.5 billion shares of Minsheng Securities after 162 rounds of bidding, equivalent to 30.3 percent of the Shanghai-based brokerage’s total share capital.

The final price was 55 percent higher than the CNY5.9 billion starting price, according to information disclosed by the judicial auction platform of e-commerce giant JD.Com.

Guolian Group owns about 46 percent of Guolian Securities and is its largest shareholder. After the auction deal closes, the parent company will also become the largest shareholder of Beijing-based Minsheng Securities.

Guolian Group’s competitors at the auction were Suzhou-based Soochow Securities and Hangzhou-based Zheshang Securities, both of which announced their participation in the event in statements released late on March 13.

The Minsheng Securities shares that were put up for sale originally belonged to Oceanwide Holdings, a Beijing-based financial and real estate group that has been mired in debt, leading to a judicial enforcement. Its holding in the brokerage will be cut to less than 1 percent.

After three consecutive years of high growth, Minsheng Securities’ net profit slumped 83 percent to CNY211 million last year from 2021, and revenue fell 46 percent to CNY2.5 billion, according to a bond-offering prospectus disclosed by the Shanghai Stock Exchange.

Founded in 1999, Guolian Group has multiple business departments such as securities, trust, and insurance. Last year, the company had a profit of CNY3.7 billion on revenue of CNY24.7 billion, according to its website.

Editor: Peter Thomas