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Deutsche Bank and other foreign investors were in talks toward taking a stake of less than 5 percent in China's Huaxia Bank Co., the second-smallest of five mainland-listed lenders, Huaxia bankers said.
Beijing-based Huaxia, the latest of five banks to float domestic shares, began discussions with Germany's biggest lender in late 2004 but had not reached agreement, a Shanghai-based senior Huaxia bank executive said.
Another executive in the lender's board office confirmed that, but declined to name other interested parties.
A 5 percent stake in Huaxia would be worth about US$100 million based on the listed share price, although foreign investors typically paid a discount to that, analysts said.
"Everything depends on the talks, but hopefully we'll announce a foreign investor in late September," said a third executive involved in negotiations with foreign institutions.
"Actually, we're not in talks with just Deutsche," said the executive, who spoke on condition of anonymity. "But negotiations with Deutsche have advanced the most."
A Deutsche Bank spokesman in Hong Kong declined to comment.
Deutsche has been active in investment banking on the mainland and is a qualified foreign institutional investor, able to invest directly in China's primary stock and debt markets.
But it has so far refrained from jumping onboard an investment bandwagon that has seen the likes of HSBC Holdings Plc. and Bank of America Corp. forking over billions of dollars for strategic stakes in Chinese lenders.
"It won't be too much, probably below 5 percent," the executive involved in discussions said when asked how much the Chinese lender planned to offload to a foreign investor.
(Shenzhen Daily July 28, 2005)
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