UPDATE 2-Hopu, Blackstone among bidders for AXA's China stake

* AXA's Taikang sale gets both Chinese and foreign bidders

* AXA's Taikang sale is now valued at more than $1 billion

* All bids came in by last Friday's first-round deadline (Adds more details, sources' quotes, industry background)

By George Chen and Michael Flaherty

HONG KONG, Nov 9 (Reuters) - French insurer AXA's (AXAF.PA) 15.6 percent stake in China's No.4 life insurer, Taikang, attracted foreign and domestic bidders including Temasek and Blackstone (BX.N), valuing the holding at more than $1 billion, sources told Reuters on Monday.

Other bidders included Bain Capital, KKR [KKR.UL] and two Chinese private equity firms, Hopu Investments and Hony Capital, according to sources with direct knowledge of the situation.

All bids were received by last Friday's first-round deadline. Sources previously told Reuters that Morgan Stanley (MS.N) was the sellside adviser for the auction.

Last month, Morgan Stanley sent Taikang's book and bidding invitations to more than 30 private equity firms, while some, for example, the Carlyle Group [CYL.UL], decided to walk away, according to the sources.

"The reaction is bigger than AXA expected," said one source.

"When water rises, the boat rises with it. So the bidding price is also getting higher than expected now," he said.

AXA's efforts to sell off its stake in Beijing-based Taikang came as Europe's second-largest insurer announced plans to buy the Asian assets of its AXA Asia Pacific (AXA.AX) unit and raise 2 billion euros to pursue growth in the region. [ID:nSYD420146]

AXA inherited the stake in Taikang in 2006 when it agreed to buy Swiss insurance company Winterthur. AXA had at one time valued Taikang at around $100 million, one of the sources said.

In China, AXA also has AXA-Minmetals Assurance Co Ltd, a 51/49 joint venture between AXA Group and state-owned China Minmetals Group, which has no relation to Taikang, and AXA plans to invest more in AXA-Minmetals to expand its insurance coverage to more Chinese cities, said the sources.

Morgan Stanley, Blackstone, KKR, Bain, Temasek [TEM.UL] and Hopu declined to comment. Hony and AXA could not be immediately reached for comment.

BIDDERS

Foreign private equity funds have previously made forays into China's insurance business.