It has had its biggest shareholder talk with a listed firm for a reverse takeover, sources said yesterday.

TEDA Investment Holding Co, which controls Bohai Securities, has contacted Sihuan Pharmaceutical Co about the broker's possible back-door listing via acquiring the drug maker, people with knowledge of the matter said.

TEDA Investment and Sihuan Pharmaceutical recently exchanged information "over basic corporate conditions" and have yet to reach any oral or written agreements, its listed unit, Tianjin TEDA Co, said in a statement on Thursday.

TEDA Investment and Shenzhen-listed TEDA Co, both controlled by the Tianjin government, last October bought a combined 40 percent stake in Bohai Securities for 900 million yuan (US$116 million).

The Tianjin government also injected 400 million yuan at that time, to bring the broker's registered capital to 2.23 billion yuan from 930 million yuan.

"Talks are in a preliminary stage and no agreement has been secured," said a Shanghai-based broker close to Bohai Securities. "TEDA is also looking for other targets, a move that might take months to finalize."

Shares of TEDA Co jumped 9.96 percent to 12.25 yuan yesterday, following a 10 percent rally on Thursday when trading resumed from a Monday suspension pending the statement.

Market rumors have been abound since the start of the month that Bohai Securities will soon seek a back-door listing.

Bohai Securities is now studying a proposal of floating stocks publicly, which is in line with the company's strategic development scheme, according to TEDA's statement.

But the firm has yet to form a detailed plan or secure a target for a back-door listing, the statement said.

Bohai Securities was established in 2001 through the merger of brokerage units of four Tianjin-based trust firms and the former Tianjin Securities Co, according to its website.

The broker is the only securities house in the under-construction new economic zone in Tianjin as the central government hopes to take advantage of the city's harbors and convenient transport to inland cities, including Beijing.

TEDA Investment, set up in December 2001, manages assets of most large State-owned companies in Tianjin.

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