Bloomberg: China's Banks Seek Standard Chartered Stake, FT Says (Update1)

China's Banks Seek Standard Chartered Stake, FT Says (Update1)

By Clare Cheung and Chia-Peck Wong

Nov. 19 (Bloomberg) -- China's three largest banks approached Temasek Holdings Pte about buying its 17 percent stake in Standard Chartered Plc, the Financial Times reported, citing unidentified people familiar with the matter.

Industrial and Commercial Bank of China Ltd., Bank of China Ltd. and China Construction Bank Corp. have made ``informal and discreet'' contact with senior personnel at Temasek about the deal in recent months, the FT said.

Chinese banks, flush with cash after raising $63 billion selling stock in the past two years, are seeking takeover targets overseas. Temasek's stake in Standard Chartered was worth about $8.3 billion at the Nov. 16 closing price in London, more than the $5.5 billion ICBC will pay for 20 percent of South Africa's Standard Bank Group Ltd.

Standard Chartered ``is quite diversified, so it's definitely something that the Chinese banks would be looking for, in terms of expansion in Asia and other emerging markets,'' Mona Chung, who helps manage $2.5 billion at Daiwa Asset Management Ltd. in Hong Kong, said today in a phone interview.

Temasek rejected the proposal, the Financial Times said. The Singapore state-owned investment company owns 17.2 percent of Standard Chartered, the London-based bank said Sept. 13. ``It is inappropriate for Temasek to comment on market speculation,'' the state-owned company said in an e-mailed response to questions.

ICBC

ICBC, the world's largest bank by market value, agreed last month to buy 20 percent of Standard Bank, Africa's largest, in the biggest overseas investment by a Chinese company. Standard Chartered, which gets most of its profit from Asia, said last week it will buy 5.3 percent of South Korea's Kyobo Life Insurance Co.

Standard Chartered spokeswomen in Hong Kong and Singapore weren't immediately available for comment. Spokesmen at ICBC, Bank of China and China Construction Bank declined to comment on ``market speculation'' when contacted today.

The Hong Kong shares of Standard Chartered fell 0.5 percent to HK$271.60 at 12:08 p.m. local time. They have gained 18 percent this year, compared with larger rival HSBC Holdings Plc.'s 5 percent decline.

To contact the reporters on this story: Clare Cheung in Hong Kong at scheung4@bloomberg.net ; Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net

Last Updated: November 18, 2007 23:16 EST