China Construction Bank, one of the country's largest state banks, denied on Monday a newspaper report it is in early talks with Bear Stearns that could lead to its taking a minority stake in the Wall Street securities firm.
An official at the news department of China Construction Bank said the bank did not have any plan to buy a stake in the Wall Street securities firm, contradicting a report by the Wall Street Journal on Monday.
We have discussed with relevant departments at the bank and what we have learnt is that the bank does not have such a plan, the official said by telephone.
The plan calls for CCB, China's third-largest bank in terms of assets, to invest $2 billion to $4 billion in convertible bonds issued by Bear Stearns, the Journal said, citing people familiar with the matter.
The bonds could eventually be converted into shares giving the Chinese bank a 10 to 20 percent stake in Bear Stearns, making CCB the securities firm's largest shareholder, the report said.
The deal's reliance on bonds, rather than a direct equity investment, would allow the Chinese bank to sidestep a difficult investment approval process in China, the Journal said.
China Construction Bank Corp. raised $9.2 billion in a record Chinese initial public offering last year.