China Bank Said in Talks With Bear Stearns
NEW YORK (AP) _ One of China's biggest state-controlled banks is discussing investing up to $4 billion in a deal that could end up giving it a minority stake in the U.S. investment firm Bear Stearns Cos., a published report said Monday.
The Wall Street Journal, citing unidentified people familiar with the matter, described the talks between China Construction Bank Corp. and Bear Stearns as in early stages and said the shape of a deal is far from fixed. But Bear Stearns shares rose 1.6 percent in morning trading.
The report comes as Chinese President Hu Jintao plans to visit the United States this week including a visit to the White House on Thursday.
Political controversy last year drove Chinese energy company Cnooc Ltd. to drop a bid for the U.S. oil company Unocal Corp. More recently, the state-owned DP World said amid a political outcry that it would sell or spin off U.S. ports operations that it would get as part of its purchase of London-based Peninsular & Oriental Steam Navigation Co.
The Journal said the current plans call for CCB, China's third-largest bank in terms of assets, to invest $2 billion to $4 billion in convertible bonds issued by Bear Stearns. The bonds could eventually be converted into shares representing a 10 percent to 20 percent stake in Bear Stearns and make the Chinese bank the largest single shareholder in Bear Stearns, the newspaper said.
The Journal said CCB would also get a seat on the Bear Stearns board.
Telephone calls were not answered Monday evening at the Beijing headquarters of China Construction Bank.
Bear Stearns spokeswoman Elizabeth Ventura said, ``We don't comment on market rumors.''