British media: Morgan Stanley close to selling CICC shares

BEIJING, February 23 (Xinhua) Morgan Stanley is nearing the sale of its stake in China International Finance Limited (CICC, "CICC") to two U.S. private equity firms, according to the FT's Chinese network (--KKR　　Kohlberg Kravis Roberts) and TPG, thus ending a tense relationship.　　The deal will bring a handsome profit for Morgan Stanley, which invested $37 million in the Chinese investment bank nearly 15 years ago and allowed Morgan Stanley to let go of its new joint venture with Chinese securities firm Fortune Nomura. Morgan Stanley wants to set up a new partnership to gain the right to trade stocks and other securities in the Chinese market.　　The new york-based bank also wants regulatory control over the new joint venture, with the limitations of CICC passive investment. The people familiar with the matter said KKR and TPG had emerged as bidders from a number of buy-out firms and agreed to issue a joint offer for the stakes.　　Bain Capital, another private equity investor, Bain the deal.　　Morgan Stanley's 34.3% stake in CICC offers opportunities to profit from the continued growth of China's economy and capital markets.　　The shares will also give buyers a sustained dividend income, a relationship with one of China's most respected and powerful securities firms, and possible joint investment opportunities. Morgan Stanley would have to sell CICC's shares before it could allow Chinese regulators to approve its new joint venture program.　　Morgan Stanley, KKR and TPG declined to comment.　　Morgan Stanley, for the first time two years ago, sought to sell its investment in CICC, but eventually gave up the move because of market turmoil and disagreements with Chinese partners. CIC, China's Sovereign investment Fund (CIC, not the same entity as CICC), invested $5 billion in Morgan Stanley at the end of 2007.