比人笑到面都黃 - 都值得

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最黑暗的時間應該過去了......

Mandarins rescued Ping An from deal

By Jamil Anderlini

Published: October 1 2008 18:16 | Last updated: October 1 2008 18:16

Ping An’s managers and shareholders must be feeling grateful to China’s painfully slow regulatory process and the cautious mandarins in Beijing who refused to approve the company’s plan to buy Fortis Investments.

Ping An agreed in March to pay €2.15bn ($3bn) for half of the asset management arm of Fortis, the Belgo-Dutch financial group which was partially nationalised on Monday with a €11.2bn capital injection from the governments of Belgium, Holland and Luxembourg.

Fortis said on Tuesday night that it did not expect the Ping An purchase to go ahead, citing “the current severe market disruption and the ongoing uncertainty in the global capital markets”.

Ping An has a 5 per cent stake in Fortis that it bought when Fortis shares were trading at more than four times their current level. Ping An said on Wednesday that changes in external economic conditions had led it to reconsider its overall strategy.

Ping An has been one of the most aggressive Chinese financial institutions in terms of overseas expansion but Beijing insiders say the group has fallen out of favour with senior political figures, in part because of the huge losses it has made on its investment in Fortis.

A tax investigation begun earlier this year is continuing and the company is still waiting for approval for an enormous fundraising plan it announced in January this year, which would have helped fund offshore acquisitions.

The 56 per cent fall in Chinese stocks this year has hurt Ping An's investment returns and contributed to a 2 per cent fall in first-half net profits and a 64 per cent drop in first-half investment income from a year earlier.

Ping An’s own Shanghai-traded shares have fallen to less than a third of their January price, leaving them in a much weaker position to raise funds for an acquisition war chest.

Ping An is not the first Chinese company to be saved from a bad investment by government refusal to sign off on a deal.

Citic Securities, the country’s largest stock brokerage, narrowly avoided sinking $1bn into Bear Stearns, which collapsed in March in the same week Ping An signed the deal to buy half of Fortis’s asset management arm.

The Citic investment in Bear was signed in October but China’s stock regulator repeatedly delayed approving the deal as the global credit crisis worsened – and when Bear went under the deal was called off.

Even if Chinese regulators had signed off on Ping An’s investment, the company had an array of other options if it wanted to back out of the deal.

The original purchase agreement had a number of break clauses, including one that cancelled the deal if Fortis underwent a change in control.

But in the end Ping An was saved from making an investment it no longer wanted by the caution of Beijing officials.

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