BoA sells $7.3 b China bank stake

BoA unloaded the entire lot of 13.5 billion CCB shares it was allowed to sell, the source said, at HK$4.20 each, or a 14.3 percent discount to their Monday close. The group of buyers included a unit of China Life Insurance Co Ltd , Singapore state investment group Temasek Holdings and China’s Hopu Investment Management Co, the source said. The sale cut BoA’s stake in the world’s second-largest bank by market value to around 10.6 per cent. A lock-up period on the block of shares sold expired last Thursday, since when equity capital markets bankers had hit the phones to line up investors, hoping to get a mandate and a fee from finding buyers.
But the sale did not involve any of the major investment banks that worked on similar stock sales, with the source saying the block of shares was a “principle to principle” negotiated deal. A $1.2 billion block of shares briefly placed in the market by an unnamed CCB shareholder early on Tuesday was part of BoA’s share sale, said the source. The bookrunner of that placement was brokerage BOCI, according to a term sheet obtained by Reuters.
“Since the placement has been expected, I would see a slightly positive impact from the share sale as the overhang was removed,” said Michael Tam, an analyst at South China Research. A Bank of America spokesman declined to comment and an official with Beijing-controlled China Construction Bank could not be immediately reached for comment.