ANALYSIS-Mammoth Ping An offer unsettles China markets

By Lu Jianxin

SHANGHAI, Jan 22 (Reuters) - A Chinese company eyeing a giant U.S. acquisition, an opportunistic capital boost, or among the worst timed equity offers in years?

Ping An Insurance (Group) Co (601318.SS)(2318.HK), partly owned by top European bank HSBC Holdings (HSBA.L)(0005.HK), has rattled Chinese financial markets with a $19 billion fund-raising plan announced at the weekend.

The deal would be China's largest domestic equity offer by far, and one of the world's biggest.

But its announcement has come while the Chinese and global stock markets are in a tailspin, and with little explanation of its timing, mechanics or purpose.

In a closed-door meeting with fund managers early this month, Ping An said it aimed to "deploy its assets globally" to acquire technology and business networks, according to a briefing document obtained by Reuters.

But several fund managers in Shanghai told Reuters that Ping An, in which HSBC owns a stake of almost 17 percent, had not signalled to them the likelihood of a major fund-raising, as blue-chip Chinese companies often do.

Speculation about its intentions among investors and China's business newspapers is now rife.

Some believe that after paying $2.7 billion for 4.2 percent of Dutch-Belgian financial services firm Fortis (FOR.BR) late last year, Ping An may want a U.S. acquisition, as the subprime crisis makes share prices cheaper.

Bigger rival China Life Insurance (601628.SS)(2628.HK) said last week that several U.S. financial firms, which it did not name, had inquired as to whether it wanted to invest in them.

A stake in UK insurers such as Aviva Plc (AV.L) or Prudential Plc (PRU.L) is another possibility, Britain's Daily Telegraph reported, though it did not obtain confirmation from Ping An itself.

Cao Xuefeng, an analyst at West China Securities in Shanghai, said Ping An's plan was so controversial that it might be vetoed in a public shareholders' vote set for March.

"This is shaping up to become a battle by investors against unilateral decisions to raise funds by listed firms," he said.

Ping An's spokesman was not available and other company officials declined to comment.

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