HONG KONG (Reuters) - Morgan Stanley MS.N has shelved the sale of its 34.3 percent stake in mainland brokerage China International Capital Corp, the South China Morning Post reported on Wednesday, as offers from bidders came in low.
Private equity firms TPG, JC Flowers and Bain Capital had offered to pay $500 million for the stake. Morgan Stanley hoped to get offers around $1 billion, the paper said.
Morgan Stanley in Hong Kong declined to comment. CICC also had no comment on the report.
Last month, the Wall Street Journal reported that bids had fallen short.
Morgan Stanley is trying to exit its relationship with CICC after striking a deal to launch a new Shanghai-based investment banking venture with a local partner.
Late last year, China’s sovereign wealth fund, China Investment Corp, bought a $5 billion stake in Morgan Stanley, which is confronting the subprime-debt crisis. Selling its remaining CICC holding at a decent profit would give the investment bank a further financial cushion.
Morgan Stanley paid just $37 million for its slice of CICC when the Chinese bank was founded 13 years ago, and its holding in the country’s most influential and profitable investment bank could fetch at least 5 billion to 6 billion yuan (US$689-826 million), industry watchers said.
While Morgan Stanley is the seller, Beijing will have the ultimate say over who buys the stake as any deal needs the approval of securities regulators.
Reporting by Michael Flaherty; Additional reporting by George Chen; Editing by Edmund Klamann
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