(Reuters) - UBS, Singapore's Temasek Holdings and French bank BNP Paribas are among half a dozen preliminary bidders to buy up to a 10 percent stake in state-owned Postal Savings Bank of China (PSBC) for at least $3 billion, people familiar with the matter told Reuters on Wednesday.
PSBC is China's biggest bank by outlets, with about 40,000 branches, and a strategic partnership could help foreign banks sell insurance and banking products to China's vast population. PSBC is preparing for an initial public offering next year, which could raise around $25 billion - the record for an IPO set last year by Alibaba Group Holding Ltd - China Daily reported in February. The pre-IPO stake sale is a stepping stone that would set a valuation benchmark for the offering.
BNP Paribas, Temasek and UBS declined to comment. Calls to PSBC's general office were not answered. Reuters could not ascertain the names of other preliminary bidders.
The Chinese government is open to selling a bigger stake in PSBC and prefers to sell to strategic investors rather than financial investors, said one of the individuals, who couldn't be named as the process is confidential.
The stake could be sold slightly above PSBC's book value, which is at a slight discount to the price-to-book value of 1.26 of China's big banks, according to Thomson Reuters data.
Preliminary bids were due last week and the parties will undertake detailed due diligence before making final offers.
China International Capital Corp (CICC) and Morgan Stanley are arranging the pre-IPO sale, the sources said.