| |
BEIJING: Troubled US investment bank Morgan Stanley is in talks to sell a stake of up to 49 per cent to China's sovereign wealth fund, the Financial Times reported Friday, citing people close to the discussions.
The talks with China Investment Corp, or CIC, which bought a 9.9 per cent stake in Morgan Stanley in December, were "advanced but no deal had been clinched yet", the paper said, quoting unidentified sources.
Morgan Stanley's top management prefer a stake sale to CIC to a merger with US lender Wachovia, according to the paper.
The paper said CIC president Gao Xiqing had been scheduled to meet Morgan Stanley executives in San Francisco.
When asked by China's state-run Xinhua news agency, an unnamed CIC official did not rule out the prospect of buying a stake in Morgan Stanley but pointed to political hurdles in the United States over such a deal.
"Even if the CIC intended to buy a stake, it could be very hard now as the purchase of a stake, even one smaller than 10 per cent, could be subject to the US government foreign investment review," the official said.
The Financial Times said the sale of a significant stake of a blue-chip Wall Street firm to a state-owned Chinese institution could cause a political backlash in Washington.
Nick Footitt, Morgan Stanley spokesman in Hong Kong, declined comment when contacted by AFP Friday. CIC could not immediately be reached.
CIC was established last year charged with managing 200 billion dollars of China's bulging forex reserves, and has become an iconic symbol of the country's growing financial muscle as it scours the world for acquisition targets.
CNBC business network reported Thursday that Morgan Stanley was in talks to be bought by the Chinese bank CITIC.
The reports came in the same week that US investment bank Lehman Brothers filed for bankruptcy while another Wall Street firm, Merrill Lynch, was forced to sell itself to Bank of America for 50 billion US dollars.
- AFP/ir
|
