Morgan Stanley Said to Sell 34.3-per cent CICC Stake to Various Parties

Morgan Stanley is selling its 34.3-per cent stake in China International
Capital Corp (CICC) to Kohlberg Kravis Roberts & Co (KKR),
TPG Capital, Singapore’s Great Eastern Holdings Ltd and the island
nation’s sovereign-wealth fund, four people with direct knowledge of
the deal said.
Morgan Stanley plans to sell stakes of about 10 per cent each to TPG
and KKR, and about a 5-per cent stake to Great Eastern, the insurer
controlled by Oversea-Chinese Banking Corp, said the people, who
declined to be identified because the matter is not public. Government
of Singapore Investment Corp (GIC) will buy the remainder, the
people said. The 34.3-per cent stake is valued at about US$1 billion,
two of the people said.
The sale will end Morgan Stanley’s 15-year involvement in CICC, the
first Sino-foreign investment bank and the top-ranked underwriter of
share sales in the country. The US firm, which ceded management
control of CICC a decade ago, plans to form a partnership with
Shenzhen-based China Fortune Securities Co.
CICC is 43.35 per cent owned by Central Huijin Investment Ltd, the
investment arm of China Investment Corp, the nation’s US$300 billion
sovereign fund, according to CICC’s website. GIC and closely held
Mingly Corp each own 7.35 per cent, while China National Investment
& Guaranty Co has 7.65 per cent.
A shareholder of Shenzhen-based China Fortune Securities Co said
this week it approved a plan by the Chinese brokerage to set up a
venture with Morgan Stanley.
Great Eastern was originally in discussions with CICC to buy Morgan
Stanley’s entire stake and the plan was blocked by Chinese regulators,
said one of the people.
Mark Lake, a Morgan Stanley spokesman; TPG spokesman Owen
Blicksilver; and Kristi Huller of KKR declined to comment. Great
Eastern spokeswoman Tan Seck Geok did not return telephone
messages left outside of normal business hours in Singapore and an
e-mail seeking comment was not immediately answered.