PING AN SHARES SUFFER AS SDB OVERPAYMENT SENTIMENT CONTINUES

China-based financial services group Ping An has seen three days of share price falls as the market maintains it sentiment that Ping An is overpaying for locally based Shenzhen Development Bank (SDB). The near $4bn deal would increase Ping An’s stake in SDB to nearly 30%. Ping An chairman Louis Cheung continues to deny that the cash-or-share offer to Newbridge Capital for its 16.76% stake in SDB favoured Newbridge’s owner TPG. “The share swap arrangement with Newbridge is based on the same market principle to value the stock”, Mr Cheung said. Controversy remained on whether TPG was contravening a lock-up agreement, under which at least some of its SDB shares should not be sold before the end of 2010. SDB said that this lock-up only applied to open trading of shares, while Ping An said that it was allowed to buy locked-up shares because it did not intend to sell them on the secondary market. Mr Cheung said that “we have decided to hold the shares on a long-term basis”, noting that “the deal has been reported to the regulators and will seek formal approval after shareholder meetings of both sides”.