Goldman Sachs Group Inc. is seeking to reap HK$15.9 billion ($2.05 billion) from selling shares in Industrial & Commercial Bank of China Ltd. in a transaction that would give it a fourfold return on its 2006 investment.
Goldman Sachs is offering 2.75 billion shares at HK$5.70 to HK$5.79 apiece, according to a term sheet for the proposed sale. The offer represents a discount of as much as 4.5 percent from the closing price in Hong Kong today for the world’s largest lender by market value.
The sale follows Goldman Sachs’s disposal of an almost $2 billion stake in ICBC in June 2009, when it offloaded the shares it was free to divest as it repaid bailout funds to the U.S. government. The New York-based lender will hold a stake worth about $8 billion in Beijing-based ICBC following the latest transaction, according to data compiled by Bloomberg.
Shares of ICBC have slumped 7.3 percent in Hong Kong trading this year, compared with a 2.3 percent gain in the benchmark Hang Seng Index. Edward Naylor, a Hong Kong-based spokesman for Goldman Sachs, declined to comment.
Goldman Sachs bought 4.9 percent of ICBC for about $2.59 billion in 2006, when the U.S. bank invested $940 million and funds managed by the company paid about $1.65 billion for stakes in ICBC, according to a regulatory filing.
The U.S. company will continue to own 10.4 billion shares, or a 3.1 percent stake, in ICBC, which may be sold at any time. Goldman Sachs had last year agreed to extend the lockup period for 80 percent of its initial holding of 16.47 billion ICBC shares until April 2010.
The latest sale would boost Goldman Sachs’s returns so far from 37 percent of its initial investment, or a stake then worth about $960 million, to about $4 billion, Bloomberg data show.
Allianz SE and American Express Co. sold a combined $1.9 billion of shares in ICBC in April 2009 after a lockup on their stakes ended, giving the two a total profit of about $1.3 billion on the sales.
Goldman Sachs shares fell $2.21, or 1.5 percent, to $142.80 as of 9:55 a.m. in New York.
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