A consortium led by Citigroup has been named the preferred bidder for Guangdong Development Bank after doubling its offer to about $3 billion (€2.5 billion), putting it on the brink of becoming the first foreign-led group to own a mainland Chinese bank.
The consortium, which has raised its bid to Rmb24.1 billion (£1.7 billion) for 85 per cent of GDB, is understood to have won rights to hold exclusive talks with the state-owned bank for one month, trumping rival offers from France's Société Générale and China's Ping An Insurance.
The deal with Citigroup and its Chinese partners, which is expected to close in the first quarter of next year, would give the US group a much-needed boost to its China business.
GDB and Citigroup declined to comment.
According to people close to the deal, Citigroup would be paying more than twice GDB's book value for a stake of less than 50 per cent, a high level by international standards. Its local partners would own the remainder.
The high price Citigroup is willing to pay underlines the determination of the world's biggest financial services company to expand in China and catch up with rivals such as HSBC. The bank increased its stake in Shanghai Pudong Development Bank, a mid-sized lender, from 4.6 per cent to 19.9 per cent this week. - (Financial Times Service)
