StanChart Shares Jump on China Stake Interest Report

Temasek, the Singapore state investment agency, has rebuffed an approach from China's three leading banks for its 17 percent stake in UK-based Standard Chartered, a report said on Monday, sending shares in Standard Chartered more than 5 percent higher.

The Financial Times quoted people familiar with the matter as saying the Industrial and Commercial Bank of China, Bank of China and China Construction Bank had made contact with Temasek in recent months about a possible deal.

However, Temasek rebuffed the advances because it considers its stake in Standard Chartered to be of financial and strategic importance, it said.

Shares in UK-listed Standard Chartered were up 4.2 percent at 17.34 pounds, off a high of 17.71, valuing the bank at 25 billion pounds ($51 billion) and Temasek's stake at about 4.3 billion pounds.

Temasek and Standard Chartered declined to comment.

Standard Chartered has been considered a takeover target for over 20 years, but past interest has come from western banks keen to increase their exposure to Asia and the other fast growing markets where the bank operates.

The interest from China reflects a perception that its major banks, which are the biggest in the world in terms of market value, will increasingly look at overseas acquisitions.

Standard Chartered's strong share price, in contrast to falling valuations for most other banks, is likely to deter interest at present from any possible western predators, such as Barclays, as it would make a deal expensive.

Standard Chartered's shares are up 16 percent this year, as investors have been attracted to its limited exposure to the global credit crunch and Asian exposure.