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| China could buy stake in Barclays | |
| (10 minutes later) | |
| Barclays is close to raising around £10bn from the Chinese and Singaporean governments to help finance its takeover of the Dutch bank giant, ABN. | Barclays is close to raising around £10bn from the Chinese and Singaporean governments to help finance its takeover of the Dutch bank giant, ABN. |
| Banking sources say the deal is being negotiated overnight. | |
| If it succeeds and if Barclays acquires ABN, the Chinese state would emerge with a shareholding of around 7% in the enlarged group. | If it succeeds and if Barclays acquires ABN, the Chinese state would emerge with a shareholding of around 7% in the enlarged group. |
| The Asian cash will be used to help Barclays increase its takeover for ABN to around £50bn. | The Asian cash will be used to help Barclays increase its takeover for ABN to around £50bn. |
| A smaller stake of around 3% would be taken by Temasek, the investment arm of the Singaporean government. | A smaller stake of around 3% would be taken by Temasek, the investment arm of the Singaporean government. |
| If Barclays fails to buy ABN, the newly formed Chinese investment authority and Temasek would take smaller stakes in the British bank. | If Barclays fails to buy ABN, the newly formed Chinese investment authority and Temasek would take smaller stakes in the British bank. |
| The Chinese and the Singaporeans are paying around 740p per Barclays share, above its closing market price on Friday night of 713.5p. | The Chinese and the Singaporeans are paying around 740p per Barclays share, above its closing market price on Friday night of 713.5p. |
| Overseas investment | Overseas investment |
| The deal was arranged by the leading US private equity house, Blackstone - which recently sold a £1.5bn stake in itself to the Chinese state. | The deal was arranged by the leading US private equity house, Blackstone - which recently sold a £1.5bn stake in itself to the Chinese state. |
| The Chinese state has $1.2 trillion of foreign exchange reserves to invest, much of which has been placed in US Treasuries or government bonds. | The Chinese state has $1.2 trillion of foreign exchange reserves to invest, much of which has been placed in US Treasuries or government bonds. |
| China recently signalled it would be taking a more imaginative and aggressive approach to how it invests hundreds of millions of dollars, including buying significant holdings in overseas companies. | China recently signalled it would be taking a more imaginative and aggressive approach to how it invests hundreds of millions of dollars, including buying significant holdings in overseas companies. |
| The deal with Barclays under negotiation would be the most ambitious manifestation to date of its new boldness as an investor. | The deal with Barclays under negotiation would be the most ambitious manifestation to date of its new boldness as an investor. |
| The idea that the Chinese government could end up with an influential stake in such an important European financial institution as the merged Barclays/ABN could prove controversial. | The idea that the Chinese government could end up with an influential stake in such an important European financial institution as the merged Barclays/ABN could prove controversial. |
| Some Barclays shareholders may be concerned that the Chinese are buying the shares without them being offered to existing shareholders. | Some Barclays shareholders may be concerned that the Chinese are buying the shares without them being offered to existing shareholders. |
| Barclays will also announce that it will buy in several billion pounds of its own shares. | Barclays will also announce that it will buy in several billion pounds of its own shares. |