Nov. 4 (Bloomberg) -- Morgan Stanley, the U.S. bank that last month posted its first profit in a year, is soliciting bids for its 34.3 percent stake in a joint-venture investment bank it formed in China in 1995, said three people familiar with the situation.
Potential bidders for the stake in China International Capital Corp., known as CICC, include U.S. private-equity firms, said the people, who spoke anonymously because the bidding process is confidential. The stake could be worth $1 billion, according to one of the people. The Wall Street Journal reported the sale plans earlier today.
John Mack, Morgan Stanley’s chairman and chief executive officer, is seeking to sell the firm’s CICC stake so that the company can build a brokerage in China that it controls. Morgan Stanley invested $35 million in CICC when it was established in 1995 as the first Sino-foreign bank. The New York-based bank ceded management control in 2000 and CICC is now run by Levin Zhu, the son of former Chinese Premier Zhu Rongji.
CICC is the top manager of Chinese domestic equity offerings this year and second to HSBC Holdings Plc in managing Asian debt offerings, excluding Japan, according to data compiled by Bloomberg. In September, CICC said it plans to open a New York office as early as this year as it seeks to trade Chinese stocks in the U.S.
China Investment Corp., the nation’s sovereign wealth fund, acquired a 9.9 percent stake in Morgan Stanley for $5 billion two years ago, when Morgan Stanley reported its first quarterly loss as a public company. Last year, Japan’s Mitsubishi UFJ Financial Group Inc. acquired a 21 percent sake in Morgan Stanley for $9 billion.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net. Cathy Chan in Hong Kong at kchan14@bloomberg.net
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