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| French Lender Confident in Bidding for GDB Stake |
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French bank Societe Generale is likely to win a 19.9-per-cent stake in Guangdong Development Bank (GDB), the bank's top management said. The bank has been competing in a lengthy battle for control of GDB with US banking giant Citigroup and "The deal will probably be clinched within two weeks," Marc Poirier, Societe Generale's country manager for Early reports said "No decision has been made yet," Poirier stressed. Another source said the successful buyer would not be chosen until Chinese Premier Wen Jiabao returned to "GDB will be our only investment in a commercial bank for retail banking, consumer finance and credit cards," Poirier said. "In a marriage, we would like to have only one wife and we are sure our wife will agree with us." According to Poirier, Societe Generale's striking advantage is its "Chinese approach." The French bank teamed up with petroleum giant Sinopec at the beginning of the battle before including top steelmaker Shanghai Baosteel Group Corp. "We have always aimed for a balance of power between Chinese and foreign investors, in compliance with Chinese regulations, and never wanted a global foreign stake higher than 25 percent," Poirier said. According to the China Banking Regulatory Commission, a single foreign bank cannot hold a stake of more than 20 percent in a Chinese bank, while the ceiling for all foreign bank holdings in Chinese banks is 25 percent. The current offer from Societe Generale and its partners amounts to about U$3 billion, including US$600 million to US$650 million from the French bank. Poirier confirmed that Baosteel Group Corp and Sinopec Corp have agreed to take equal 20-per-cent stakes. Canadian fund manager Caisse de Depot et Placement du Quebec recently joined the Societe Generale consortium, aiming to take a 5-per-cent share, while two smaller Chinese partners joined in December 2005 to buy a further 20-per-cent stake alongside Societe Generale. The Citigroup consortium, which includes the China Life Group, the nation's largest insurer, and the State Grid Corp, the major electricity distributor, also offered around US$3 billion for an 85-per-cent stake in GDB. China Guodian Corp, a major power supplier, joined Citigroup after former partner China National Cereals, Oil & Foodstuffs Corp quit in June. The Carlyle Group, a private Washington-based investment firm, reportedly pulled out of the bidding group on Tuesday. (
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