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Ping An seeks stake in lender

CHINA'S Ping An Insurance (Group) Co plans to buy a stake worth up to more than 22 billion yuan (US$3.2 billion) in Shenzhen Development Bank.

Ping An, China's second-biggest life insurer, yesterday said it would pay 11.4 billion yuan for 520.4 million shares in Shenzhen Bank held by Newbridge Capital, a unit of TPG Capital. Through Newbridge Capital, TPG had held a 16.8-percent stake in Shenzhen Bank.

In a statement to the Shanghai Stock Exchange, Ping An also confirmed that it was buying up to 585 million shares in Shenzhen Bank for 10.7 billion yuan through a private placement.

Ping An, which currently owns 4.68 percent in Shenzhen Bank, said its holdings would not exceed 30 percent of Shenzhen Bank. It added that it was a long-term investment.

Both companies suspended trading in their shares before the announcement. Shenzhen Bank has surged 111 percent this year to 20 yuan, the second-biggest gainer among banks traded on Chinese mainland. Ping An has jumped 70 percent in Shanghai.

Shenzhen-based Ping An is seeking to boost its banking business to become a financial conglomerate. Ping An last year reported its first annual profit decline since going public in 2004 after writing down 22.8 billion yuan from its investment in Fortis.

Shenzhen Bank, a medium-sized Chinese lender, needs new funding to bolster capital and meet regulatory requirements. TPG bought 18 percent of Shenzhen Bank for US$155 million as a financial investor in 2004 and is seeking buyers as its entire stake will come out of a lock-up period next year.

TPG, the Texas-based private equity group founded by David Bonderman, is the only buyout fund holding a stake in a Chinese mainland lender, where the banking regulator in 2007 barred private equity investors from buying into small and medium-sized banks. Its 17-percent holding in Shenzhen Bank is worth 10.4 billion yuan based on the latest market price.


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