Haitong Securities in talks to buy BES unit

Chinese brokerage Haitong Securities Ltd is in talks to buy Portuguese bank Banco Espirito Santo's (BES) investment banking unit.  

A purchase of the bailed-out Portuguese lender's unit would be Haitong's first acquisition outside China.

It would be the highest-profile overseas deal by a Chinese brokerage since Citic Securities Citic, China's largest brokerage, purchased CLSA from French bank Credit Agricole SA for $1.25 billion in 2013.

Haitong said in a statement late on Thursday it's in talks to buy Banco Espirito Santo de Investimento SA (BESI), BES's investment banking arm, confirming an earlier Reuters story.

Local media in Portugal have valued BESI at around 400 million euros ($493 million).

A spokesman for BESI did not offer any immediate comment when contacted by Reuters.

Portugal's central bank rescued BES using 4.9 billion euros of public funds in August this year and is now seeking to recoup those funds through asset sales.

BESI, the largest investment bank in Portugal, made a net profit of 3 million euros in the first half of 2014 while its parent BES made a net loss of 3.6 billion euros in the same period, according to the company's website. BESI employs about 1,000 people and had 5.8 billion euros in assets at the end of June 2014.

Haitong raised $1.7 billion through a Hong Kong share listing in 2012. It said in the prospectus for that deal it was setting aside about 35 percent of proceeds "for strategic acquisitions of overseas securities firms and/or further expansion of our overseas securities business."

In October last year China Construction Bank Corp bought Brazil's Banco Industrial e Comercial SA.

Industrial and Commercial Bank of China bought 80 percent of Standard Bank's Argentina SA from Standard Bank London Holdings for an estimated $600 million in cash in 2011.

"It's been very rare to have the opportunity globally in the last five years to buy a controlling stake in any sizeable financial company, so it's an opportunistic buy," said Jim Antos, banking analyst at Mizuho Securities Asia.

Haitong shares were halted on Thursday ahead of the announcement. Haitong's shares have risen 44 percent so far this year in Shanghai, outpacing a 27 percent rise in the Shanghai CSI 300 index.