The Wall Street Journal-20080112-The Buzz- Morgan Stanley Stake in China Bank Attracts TPG- J-C- Flowers and Starr
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The Buzz: Morgan Stanley Stake in China Bank Attracts TPG, J.C. Flowers and Starr
HONG KONG -- Private-equity firms TPG and J.C. Flowers & Co. -- plus Starr International Co., an investment vehicle controlled by Maurice Greenberg -- are among the Western financial firms that covet Morgan Stanley's stake in a Chinese investment bank, people familiar with the matter said.
"Bidders are looking to pay well north of $1 billion for the stake," one person said.
Wall Street firm Morgan Stanley intends to sell its 34.3% stake in China International Capital Corp. as it focuses on setting up a new securities joint venture in China. The firm recently signed a deal to team up with Shanghai-based China Fortune Securities Co. to create a new securities joint venture. China's securities regulator won't allow Morgan Stanley to hold stakes in both joint ventures at the same time.
CICC's main attraction for any investor is exposure to China's booming stock markets. CICC was the top-earning investment bank in underwriting initial public offerings on the mainland last year.
"It's rare to get access to such an attractive financial firm in China, so it's an asset that quite a few firms are looking into," another person familiar with the matter said.
CICC, TPG and Morgan Stanley declined to comment. Starr International and J.C. Flowers weren't immediately available to comment.
At present, just four foreign banks have China investment-banking ventures: Morgan Stanley, Goldman Sachs Group Inc., Swiss bank UBS AG and Asian investment bank and brokerage CLSA, a unit of France's Credit Agricole SA.
Meanwhile, J.P. Morgan Chase & Co. executive Joseph D. Regan told Dow Jones Newswires on the sidelines of a conference in Tianjin on Friday that his bank was in talks with a few Chinese brokerage firms on a joint venture but has yet to pick a partner.
In addition, Barclays PLC intends to take a strategic stake in China Development Bank and will soon gain regulatory approval to acquire a 19.5% stake in New China Trust & Investment Co., an executive at Barclays Capital Asia Ltd. said Friday.
