Price row stalls Ping An move on SDB

Talks also said to involve an offer to invest in new shares to help the bank meet its capital requirements

A bid by Ping An Insurance (Group), the mainland's number two life insurer, to buy a stake in troubled Shenzhen Development Bank (SDB) from United States private equity firm Newbridge Capital has stalled over pricing, sources said.

The negotiations, which according to the sources began in September, also involved an offer from Ping An to invest in new shares to help the bank meet its capital requirements.

The US firm denied it priced the offer. 'We have made a commitment not to sell our shares for at least five years,' said Newbridge managing partner Shan Weijian yesterday. 'We are therefore not sellers. We do not lack suitors but we have never asked or indicated any price to sell our shares.'

The sources said Ping An has signed an agreement with Newbridge prohibiting the insurer from buying SDB shares in the open market for 18 months, to prevent it launching a hostile takeover.

US investment bank Goldman Sachs is advising the insurer on the deal. Ping An, Goldman Sachs and SDB would not comment yesterday.

Newbridge became the first foreign investor to take management control of a mainland state-owned bank when in mid-2004 it bought a 17.89 per cent stake in SDB for 1.23 billion yuan following a protracted two-year courtship.