PE firms chase Morgan Stanley’s CICC stake

Three US private equity firms are chasing Morgan Stanley’s stake in China International Capital Corp (CICC), with the successful bid tipped to come in at well above US$1 billion, the Wall Street Journal reported. TPG, JC Flowers and Maurice Greenberg’s Starr International have all been linked to the 34.3% holding. Morgan Stanley set up CICC in association with China Construction Bank but has since agreed to establish a new securities joint venture with China Fortune Securities. The regulator will not allow the US firm to hold stakes in both joint ventures at the same time. At present, only Morgan Stanley, Goldman Sachs, UBS and CLSA have investment-banking ventures in China, although other foreign banks are in the process of looking for domestic partners. CICC was the top-earning investment bank in underwriting mainland share offerings in 2007.