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Report: Citigroup bids US$3b for China bank
(AP)
Updated: 2005-12-31 06:46
A consortium led by Citigroup Inc. has bid US$3 billion for a stake in
China's Guangdong Development Bank, a Chinese magazine reported Friday.
If accepted, the offer would be one of the biggest foreign acquisitions in
China ever.
The mid-sized Chinese lender, based in the southern province of Guangdong, is
mulling bids from three contenders, including Citigroup, France's Societe
Generale SA and Ping An Insurance (Group) Co., Caijing, a Chinese-language
financial magazine said in a report posted on its Web site.
Citigroup's spokeswoman in Shanghai, Marine Mao, said the bank would not
comment.
"We have nothing to release about this at the moment," said Ai Liqun,
Guangdong Development Bank's spokeswoman.
Caijing said top Guangdong provincial officials were considering the offers
and that Citigroup had recently raised its bid from an original offer of $2.85
billion.
The bid is for an 85 percent stake in the bank, which reportedly is being
allowed to sell off a larger share of its equity than usual because of its
urgent need for capital and its large burden of bad loans. China usually limits
investments by a single foreign institution in a state-run bank to less than 20
percent, with total foreign investment capped at 25 percent.
Guangdong provincial officials refused comment, though they acknowledged that
the government was involved in the bank's restructuring.
According to the Caijing report, Societe Generale teamed up with China Huawen
Enterprises Development Corp. to make a $2.9 billion bid, while Ping An
Insurance's offer was $2.8 billion. Dutch bank ABN Amro, earlier reported to be
bidding, has withdrawn, it said.
The group led by Citigroup also reportedly includes state-owned commodities
giant China National Cereals, Oils & Foodstuffs Corp. The Caijing article
did not name others participating, saying only that they were state-owned
companies.
The final three bids were outlined Wednesday by Li Chunhong, deputy secretary
general of the Guangdong provincial government, who is also part of the team
working on the local bank's restructuring, the report said.
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