US Newbridge calls off China Minsheng deal

US fund Newbridge Capital has called off a deal to buy 4.82 percent of China's Minsheng Bank, but analysts said that should not detract from a planned Hong Kong IPO that could raise $1 billion this year.
Private equity investor Newbridge had agreed to buy 175 million state-owned shares in Minsheng from China National Coal Group Corp, Minsheng said in a statement on Saturday.
Judging by previous deals, Newbridge could have paid more than $100 million for its Minsheng stake.
That deal had now been negated by both parties, Minsheng Banking Corp, the country's sole private lender, said, without offering a reason.
No one at Newbridge or Minsheng was available for comment. The sticking point in talks between foreign investors and local banks is often pricing, or reaching consensus on a value for dubious assets.
Cancelling the deal leaves Newbridge free to push a plan seen as more significant - buying a controlling 18 percent stake in Shenzhen Development Bank for $150 million, analysts and industry sources said.
Newbridge has tried once before to take control of the lender based in the boomtown of Shenzhen, but was stymied by various legal disputes.
"We have recently received notice from China National Coal saying it had reached, and signed, an agreement with Newbridge to terminate the share transfer," Minsheng said in its statement.
China is eager for foreign investors to inject global practices into a banking industry saddled with more than $200 billion in non-performing loans and notorious for corruption.
Newbridge may have missed out on a windfall.
"It's not so much of a loss after Newbridge withdrew. Newbridge was just in for a short haul to capitalise on Minsheng's share float," said Wu Yonggang, banking analyst at Guotai Junan Securities.
"The IFC already owns a stake in Minsheng and that name should be sufficient to attract investors to Minsheng's IPO."
The International Finance Corp, the World Bank's private sector arm, has bought 1.08 percent of Minsheng for $23.1 million, the bank and a shareholder have said.