US private equity firm Warburg Pincus will pay Beijing's city government about US$300 million for a stake of as much as 49% in Wangfujing Department Stores, one of the capital's best-known retailers, the South China Morning Post reported. "Warburg is definitely going ahead with the deal," a source involved in the bid told the newspaper. Two rival bidders – Washington-based buyout firm Carlyle Group and Legend Capital, an investment subsidiary of Legend Holdings – dropped out of the bidding for a non-controlling stake in the chain, whose flagship store is on Wangfujing Street, sources said. The purchase, which has been in the regulatory spotlight in recent months, still requires government approval. "Negotiations are getting very tough because of the political and media environment in China at the moment," one private equity fund manager said. Wangfujing, which was established in 1955 as Beijing's main department store, sold shares in Shanghai in 1994.