BNP Partners Receives Acquisition Overtures From Rival
BNP Partners confirms that it has received an offer from an industry competitor to acquire its wealth management business.
- (1888PressRelease) November 22, 2015 - BNP Partners, the Shanghai, China headquartered broker-dealer confirms that it has received an offer from Beijing-headquartered China International Capital Corporation (CICC) to acquire its wealth and investment management business.
The firm, which is privately-owned by its principals and senior executives, is being offered 135 million yuan cash in return for its private client roster. The offer has been rejected by BNP Partners on the grounds that the deal would not be in the best interests of its clients.
The offer is one of a number of approaches being reported within the industry as players attempt to consolidate in the aftermath of the volatility in China's mainland exchanges, the Shanghai and Shenzhen Composites.
"The severity of the turmoil caught quite a few wealth managers completely by surprise," said Gerald E. Powers, Chief Investment Officer at BNP Partners. "We've heard unsubstantiated reports of some firms who had sought authorization from clients to temporarily suspend their risk limits in order to expose their capital to the never-ending stream of IPOs. Those clients are now nursing catastrophic losses," added Powers.
The firm says it was not adversely affected by the turmoil and most of its clients are still positive for the year despite the volatility which saw both mainland indexes shed as much as 30% of their value in an 8 week period that began in mid-June.
"CICC is a very large and very competent player in China's wealth management industry but there are a number of incompatibilities with our business model that we feel our clients, not to mention ourselves, would find insurmountable," concluded Powers.
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