Guangdong bank shortlists 4 for stake sale
(Shenzhen Daily/Agencies)
Updated: 2005-10-18 14:31

Guangdong Development Bank shortlisted four bidders for its stake sale, including Citigroup Inc. and DBS Group Holdings, Hong Kong-based Apple Daily reported Monday, without identifying the sources.

The other two bidders are the private equity firm Carlyle Group and a group comprised of China Huawen Enterprise Development and a major European bank, the paper reported.

JPMorgan Chase & Co. and Ping An Insurance Co., which were two of the six groups shortlisted in the previous round of bidding, were cut from the list of bidders, the report said. Carlyle is unlikely to win the final bid, it said.

The Guangdong bank would start negotiating terms with the four bidders this week and sign a memorandum of understanding with the successful bidder as early as mid-November, the report said. The buyer might spend as much as US$4 billion for a stake of more than 50 percent in the bank, the report said.

Southeast Asia's largest lender, DBS Holdings, which has been in talks with the Guangdong bank, wanted a controlling stake in the Chinese lender, people familiar with the deal said.

The Singapore-based DBS wanted to have more than 50 percent of the bank and is also asking for certain warranties, said one banking source.

Media reports have valued the Guangdong deal at about S$2 billion (US$1.18 billion).

Guangdong Development, set up in 1988, had 344.5 billion yuan (US$42.5 billion) in assets at the end of 2004 and 215.7 billion yuan in outstanding loans, according to the bank's Web site. The bank has 26 branches in cities including Guangzhou, Shanghai, Beijing, Zhuhai and Nanjing.