China Development Bank denies bidding for WestLB: reports

BEIJING Tue Feb 1, 2011 1:37am EST

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BEIJING (Reuters) - China Development Bank, one of the country's powerful state-owned banks, says it is not participating in the bidding to acquire troubled German bank WestLB, according to Chinese media reports.

A CDB spokesperson refuted an earlier report by the Wall Street Journal that said CDB, a former policy bank that is now a commercial lender, was one of four bidders seeking to acquire or take a stake in the German lender, the reports said.

Private equity investor Apollo Management LP is one of the bidders, two financial sources told Reuters last month on condition of not being named because the discussions are private.

The other two are Blackstone Group LP and J.C. Flowers & Co., the Journal reported last week.

Calls to CDB's communications department went unanswered Tuesday, the day before the week-long Lunar New Year holiday officially begins.

Ailing WestLB, partially owned by the German state of North Rhine-Westphalia and local savings banks, has been put up for sale as a condition for regulatory approval of state aid granted in the financial crisis.

The EU has demanded that WestLB find new owners by the end of the year, and the bank hopes to strike a deal on its restructuring by February 15.

One regional politician has put the bank's value at least 10 billion euros ($13.7 billion).

While the sale of parts of WestLB could go through a sale of the complete bank is unlikely, analysts and investment bankers have said.

China Development Bank owns an about 2 percent stake in Britain's Barclays Plc.

($1=.7291 Euro)

(Reporting by Terril Yue Jones; Editing by Jonathan Hopfner)

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