CITIC Group eyes sweetening offer for CIFH -paper

HONG KONG (Reuters) - China CITIC Group is considering whether to raise its offer to privatise its small Hong Kong-listed arm CITIC International Financial Holdings Ltd 0183.HK (CIFH), a Hong Kong newspaper reported on Monday.

The South China Morning Post cited sources as saying the Chinese state-owned financial group was under pressure from shareholders to sweeten the deal.

"There is such a gap between the current offer and where industry bids have been, so they're under a lot of pressure," said one of the sources.

In June, Chinese state-owned financial conglomerate CITIC Group offered to buy its small Hong Kong-listed arm CIFH for $1.4 billion as part of an earlier-announced deal that would boost Spanish bank BBVA's toehold in fast-growing Asia.

CITIC Group has offered one China CITIC Bank (0998.HK) H share plus HK$1.46 cash for each CIFH share.

The newspaper said CITIC Group would need to raise its offer by HK$0.70 to HK$2.16 if the group wants to bring the price to book back to 1.6 times as at the deal announced in June, from the current 0.99 times.

The newspaper quoted an unnamed shareholder as saying the Chinese parent may raise the offer by 15 percent to HK$1.68 realistically.

CIFH officials were not immediately available for comment.

BBVA (BBVA.MC), Spain's second-largest lender, had said earlier in June it would pay about 800 million euros ($1.25 billion) to double its stakes in China CITIC Bank (0998.HK) and CIFH. CIFH will be delisted and folded into mainland based China CITIC Bank under proposed terms.

(US$1=HK$7.8)

(Reporting by Donny Kwok; Editing by Keiron Henderson)