Private equity firms eye Asian FIG deals

Bain and General Atlantic will submit bids estimated in the $1bn region for Morgan Stanley’s stake in CICC, while Blackstone and KKR are reportedly bidding for AXA’s stake in China’s Taikang Life.

US-based Bain Capital and General Atlantic are among the investors looking to acquire Morgan Stanley’s 34.3 percent stake in China International Capital Corporation (CICC), the country’s largest investment bank, an industry source has confirmed to sister news site PEI Asia.

First round bids for the stake, which has been valued between $1.2 billion and $1.5 billion, are due next Tuesday, the source said.

Morgan Stanley declined to comment. Bain Capital and General Atlantic could not be reached at press time.

Asia’s financial services sector is shaping up to be fertile investment territory for funds operating at the larger end of the deal spectrum. Just last month, Primus Financial Holdings and China Strategic Holdings acquired a 97.57 percent stake in Taiwanese insurance company Nan Shan Life Insurance for $2.15 billion from US insurance giant AIG; Asia’s largest financial services sector deal this year.

Morgan Stanley was a founder investor in CICC in 1995 alongside state-backed investment company China Jianyin Investment, state institution China National Investment & Guaranty Corporation, Chinese conglomerate Mingly Corporation and Singapore’s GIC. The US bank invested between $35 million and $37 million in CICC at the time, according to media reports.

The US investment bank reportedly first tried to sell its CICC stake in 2007, at which time potential purchasers included private equity firms TPG and JC Flowers. However, the process was halted due to low offers in the light of the financial crisis and disagreements with regulators. According to the Wall Street Journal, one major obstacle was a share program which compensated CICC’s employees with equity in CICC, potentially diluting Morgan Stanley’s stake to 27 percent from 34.3 percent.

Also this week, media reports have named The Blackstone Group, Kohlberg Kravis Roberts and Singapore’s Temasek Holdings among investors that will likely bid for AXA’s 15.6 percent stake in Chinese insurer Taikang Life.

The French insurer’s stake is worth $1.05 billion, valuing the company at $28.12 billion, the sources reportedly told Reuters. The first round of bids is expected to be submitted by this Friday, with AXA aiming to close the deal before the end of the year, they added.

AXA acquired the stake in China’s fourth largest insurance company as part of its acquisition of Swiss insurer Winterthur in 2006.