HONG KONG (Reuters) – Private equity firm TPG is planning to exit China Grand Automotive Services Co Ltd through a stock listing, and has hired China International Capital Corp (CICC) and Goldman Sachs (GS.N) as lead managers, people familiar with the process told Reuters.
The size and timing of the offer is still uncertain, but some bankers estimate the initial public offering (IPO) could raise about $1 billion.
TPG and Goldman Sachs declined comment, and CICC officials were not available for immediate comment.
TPG’s planned exit comes as equity markets in the region are showing signs of stability. TPG owns about a 40 percent stake in China Grand Automotive and made its first investment in the company in 2007, one person said.
It was not clear whether TPG would make a full exit or where it would list the business.
China Grand Auto is China’s largest auto dealership network, selling new cars and providing after-sale service.
Last month, Zhongsheng Group, a Chinese dealership providing services to car makers, halved its Hong Kong IPO to $474 million due to a lukewarm response to the offer.
Zhongsheng offered shares at 14.2 times to 19 times 2010 forecast earnings. By comparison, Hong Kong-based distributor Dah Chong Hong Holdings (1828.HK) trades at about 12 times 2010 forecast earnings. Zhongsheng’s founders and private equity firm General Atlantic did not sell any existing shares in the IPO.
By Denny Thomas
(Editing by Ken Wills)