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Everbright bank buying into Prudential China fund JV

(Reuters)
Updated: 2007-04-16 14:12

Everbright Bankis poised to buy a 35 percent stake in theShanghai-based fund management joint venture of U.S. insurer Prudential Financial, two sources close to the situation said on Monday.

Everbright Bank, which is 21 percent owned byHong Kong-listed China Everbright Ltd., will buy the stake fromChina Everbright Group, which now holds a 67 percent stake of Everbright Pramerica Fund Management Co., the sources told Reuters.

Beijing-based Everbright Group is the parent of financial service conglomerate China Everbright Ltd.

Prudential Financial now has a 33 percent stake in Everbright Pramerica, which currently manages four mutual funds worth about 2.2 billion yuan ($284.9 million) in total.

After the deal, Everbright Bank is expected to become the top shareholder of the fund venture, while Prudential will maintain a 33 percent stake.

Everbright Group's stake will be reduced to 32 percent, which is likely to be sold to Prudential Financial and Everbright Bank eventually, the sources said.

Everbright Bank, which is ready to receive a 20 billion yuan government capital injection ahead of a proposed overseas stock listing, declined comment. Officials at Prudential and its fund venture were not immediately available for comment.

Everbright Bank is finalizing details of the purchase with Everbright Group, and the deal would require approval from Chinese banking and securities regulators, the sources said.