Minsheng moves for stake in US bank

China Minsheng Bank has said it will buy a 9.9% stake in the parent company of United Commercial Bank, the first strategic investment in a US bank by a Chinese lender. Minsheng's US$200 million-plus investment in UCBH Holdings, which also owns US companies that do business in China, Hong Kong and Taiwan, is subject to approval from both US and Chinese banking regulators, the Financial Times reported. The first stage of the transaction will see UCBH issue 5.4 million new shares, or 4.9% of its enlarged share capital, to Minsheng at US$17.79 per share. The Chinese bank will increase its stake to 9.9% next year and has the right to go to 20% by June 2009, although getting approval for anything over 10% may be tricky.