Hang Seng Bank deal runs aground | FT

Advanced plans by Hang Seng Bank to take a significant equity stake in Minsheng Bank, China's largest privately owned bank, appear to have fallen through, leaving the mainland group open to approaches from other foreign suitors, industry executives said.....

It was intending to take an 8 per cent equity stake in Minsheng, possibly making it the single largest shareholder.....

....One was that Minsheng, one of China's most successful banks since its establishment in 1995, had grown wary about ceding too much management influence to an outsider.

Another sticking point was the price. Although Hang Seng has not confirmed any of several figures put on the deal by the Hong Kong media, industry insiders said Minsheng was expecting it to pay about 2.5 times the book value.

HSBC Holdings paid 1.1 times the book price for its Bank of Shanghai stake and Citibank paid 1.5 times for its stake in Shanghai Pudong Development Bank.....

....Negotiations to sell a small equity stake, probably about 2 per cent, to the International Finance Corp, the private sector arm of the World Bank, are understood to remain on course.

Minsheng was also ready to consider other overseas suitors, so long as they wanted to act as a constructive strategic investor, not a controlling stakeholder.

Separately, Minsheng, which is already listed on the domestic renminbi- denominated A-share market, has begun to approach investment banks over the prospect of a foreign listing, bankers said.

The bank is understood to require the capital to fund aggressive expansion.