Citigroup Bids for China Stake

Citigroup Inc. has made the highest bid in a four-way battle for a mid-sized Chinese lender, offering about $1.5 billion for a stake of as much as 50%, four sources said.

A 50% stake would be an unprecedented share for a single foreign investor.

If successful, the purchase would grant the world’s top financial services firm unusually large influence over a Chinese lender of that size.

Citigroup, vying with ABN AMRO, Societe Generale and DBS Group Holdings for a stake in struggling Guangdong Development Bank, wants as much as half of the lender if regulators will allow it, three banking sources and one government source close to the situation said.

Beijing is expected to make its decision by early 2006, but Citigroup’s bid could hinge upon whether regulators will relax an ownership cap of 20% set for a single foreign firm, sources said.