Report says Barclays seeks billions for ABN

SINGAPORE (Reuters) - Britain's Barclays (BARC.L: Quote, Profile, Research) is in talks with the governments of China and Singapore to raise 10 billion pounds ($20.6 billion) to help fund its planned purchase of Dutch bank ABN AMRO (AAH.AS: Quote, Profile, Research), the BBC reported on Monday.

Citing unidentified banking sources, the BBC said on its Web site www.bbcnews.com that if the talks succeeded, China would hold a 7 percent stake in the merged bank, while Singapore would own 3 percent through its investment holding company, Temasek (TEM.UL: Quote, Profile, Research).

The Wall Street Journal, citing people familiar with the matter, said Barclays was close to an agreement to sell what it described as a large stake to Temasek and another investor to help back its bid for ABN.

The newspaper said on its www.wsj.com website that while the size of Temasek's potential stake in Barclays was not clear, a Barclays stake of 5 percent to 10 percent would be worth about $4.8 billion to $9.6 billion, based on Barclays's market value.

Spokesmen for Temasek and Barclays declined to comment.

Barclays said last week that it might add cash to sweeten its agreed 65 billion euro ($90 billion) offer for ABN as it battles against a higher bid from a rival consortium led by Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and that also includes Belgian-Dutch group Fortis (FOR.BR: Quote, Profile, Research) and Spain's Santander (SAN.MC: Quote, Profile, Research).

The BBC said the two Asian governments would pay around 740 pence for each Barclays share, 3.7 percent above Friday's closing price of 713.5 pence.

If Barclays fails in its improved bid to buy ABN, the newly formed Chinese investment authority and Temasek would instead take smaller stakes in Barclays, the BBC said.

The deal is being arranged with the help of U.S. private equity firm Blackstone (BX.N: Quote, Profile, Research), which in May sold a $3 billion stake in itself to the Chinese state, it said. Blackstone shares have lost more than 16 percent of their value since the company's stock was listed in New York on June 22.

China is in the process of setting up a $200 billion fund to help it invest some of its $1.33 trillion in foreign exchange reserves.

($1=.4865 Pound)

($1=.7233 Euro)