Ping An To Buy Stake in TPG-Backed Shenzhen Bank

HONGKONG (Reuters) – China’s Shenzhen Development Bank (000001.SZ) plans to raise at least 8 billion yuan ($1.17 billion) selling a stake to Ping An Insurance (Group) (2318.HK) via a private placement of shares, a person with direct knowledge of the deal said on Friday.

Ping An plans to buy the shares for at least 16.4 yuan apiece, said the person who declined to be identified.

Shenzhen Bank shares closed at 20 yuan last Friday, before trading was suspended pending an announcement to be made before this Saturday.

Ping An would buy new shares in Shenzhen Bank and eventually become its biggest shareholder, people familiar with the talks told Reuters on Monday. The planned share sale is worth about 6 billion yuan, while Ping An is also in talks to buy a stake from Shenzhen Bank’s biggest shareholder TPG Capital [TPG.UL], Chinese magazine Caijing reported on Thursday.

TPG owns a 16.76 percent stake through its unit Newbridge Capital.

However, a person familiar with the situation told Reuters that Newbridge is not yet in discussion with Ping An. Newbridge declined to comment.

Ping An, China’s second-biggest life insurer, is seeking to boost its banking business to become a financial conglomerate. Shenzhen Bank, a medium-sized Chinese lender, needs new funding to bolster capital and meet regulatory requirements. Both companies are based in China’s southern city of Shenzhen, near Hong Kong.

TPG bought 18 percent of Shenzhen Bank for $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. (US$1=6.832 Yuan)

By Xie Heng and Clare Jim