Citigroup and Societe Generale are set to submit revised bids for a stake in China's Guangdong Development Bank after being initially rejected by Beijing for seeking more than the allowed 20%.
According to Reuters, banking sources have indicated that both banks have restructured their rival bidding consortiums in order to attract local firms to the deal. The Citigroup-led consortium is said to have brought China Life Insurance, the country’s biggest life insurer, on board. The consortium is thought to want an 80% stake in the bank for around $3 billion.
The Societe Generale consortium is bidding for 85% of the bank. Chinese partners in the venture include the country’s largest steel maker Baoshan Iron and Steel Co and oil refiner Sinopec Corp.
Guangdong Bank is the second largest lender in the eponymous southern province and investors want access to its $1.7 trillion in personal savings. However, the winning bidder will also have to take on $6 billion of bad debt that the mid-size bank carries.