TPG's Newbridge Raises $1.2 Billion in Ping An Stock Offering
TPG’s Newbridge Raises $1.2 Billion in Ping An Offering
Qilai Shen/Bloomberg
The private equity firm sold about 139.1 million shares at HK$65.30 each, the high end of the offering range and 1.2 percent lower than Ping An’s last closing price in Hong Kong, according to terms of the sale obtained by Bloomberg News.
The private equity firm sold about 139.1 million shares at HK$65.30 each, the high end of the offering range and 1.2 percent lower than Ping An’s last closing price in Hong Kong, according to terms of the sale obtained by Bloomberg News. Photographer: Qilai Shen/Bloomberg
Shares in Ping An Insurance (Group) Co. climbed after TPG Capital’s Asian unit sold the remainder of its stake in China’s second-biggest insurer.
Newbridge Capital LLC raised about HK$9.1 billion ($1.2 billion) selling about 139.1 million Ping An shares, exiting a six-year investment in China’s financial industry. The shares were sold at HK$65.30 each, the high end of an offering range, according to sale terms obtained by Bloomberg News.
Ping An’s stock jumped 5.4 percent, the most since June 21, in Hong Kong to close at HK$69.70. New York-based Morgan Stanley managed the stock sale.
The San Francisco-based buyout firm has raised a combined $2.44 billion selling Ping An stock received in exchange for its stake in Shenzhen Development Bank Co., joining Allianz SE and Goldman Sachs Group Inc. in reaping profits from holdings in Chinese financial firms. Newbridge paid about $145 million for its Shenzhen Bank stake in 2004, becoming the first foreign investor to control a Chinese lender.
“Although there’s still room for Ping An to grow, TPG has made a big enough profit selling its stake,” Michiya Tomita, a Hong Kong-based fund manager for Mitsubishi UFJ Asset Management Co., which oversees $65 billion. “It was a very good investment.”
Tim Payne, a Hong Kong spokesman at Brunswick Group Ltd. which is hired by TPG, declined to comment.
Shenzhen Development shares fell 2.5 percent to 17.73 yuan at the 11.30 a.m. break on the Shenzhen stock exchange.
Expanding Profit
Newbridge received 299 million Ping An shares after selling its stake in Shenzhen Development in June 2009. The firm raised $1.24 billion by selling a stake in the Shenzhen, southern China-based insurer four months ago.
Started in 1992, Fort Worth, Texas-based TPG oversees about $48 billion, according to its website. The leveraged buyout firm raised HK$539.2 million in February by selling shares in Lenovo Group Ltd., China’s biggest maker of personal computers.
Under Newbridge’s ownership, Shenzhen Bank’s net income increased to 5 billion yuan last year from 286 million yuan in 2004, and the stock price more than tripled. Former Chairman Frank Newman, appointed by Newbridge in June 2005, improved risk management, helped ease the lender’s ability to raise funds and boosted its capital strength.
Newbridge is the only foreign buyout firm to gain approval from China’s government to invest in a local lender. In 2007, the China Banking Regulatory Commission rejected Carlyle Group’s bid to buy part of Chongqing City Commercial Bank.
Allianz of Munich, Europe’s biggest insurer, said on May 12 it earned 500 million euros ($641 million) by cutting its stake in Beijing-based Industrial & Commercial Bank of China Ltd., the nation’s largest lender. Goldman Sachs in New York raised $1.91 billion selling part of its holding in ICBC in June 2009.
Ping An shifted its focus to the Chinese market after losing $3.3 billion on its 2008 investment in Fortis, which was bailed out by the Dutch and Belgian governments during the credit crisis.
To contact the reporters on this story: Zijing Wu in London at zwu17@bloomberg.net; Fox Hu in Hong Kong at fhu7@bloomberg.net
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