Boyu Capital is in talks with Chinese banks to secure a loan of about USD 1.4bn to USD 1.5bn for the Starbucks China acquisition, said two sources familiar with the matter.

The Chinese lenders include Industrial Bank, Ping An Bank and Shanghai Pudong Development Bank, said the sources.

The private equity firm is negotiating terms for a loan that would likely have a five-year maturity. Boyu is looking to acquire a 60% to 70% stake in Starbucks China, the sources added.

The value of the sale of the Chinese operations of Starbucks includes both the upfront investment from a potential partner and future royalty payments, according to a third source familiar with the matter. The total value could exceed USD 10bn, including royalties, the source added.

As reported by a newswire on 28 October, Boyu Capital has emerged as the leading contender in Starbucks’s bid to bring on a partner for its China operations, surpassing rivals such as Carlyle Group.

Internet companies and other investors may join the transaction as limited partners to co-finance the deal, as per the report.

Boyu Capital, Carlyle Group, EQT, and HongShan have been shortlisted as finalists in the bidding process, as reported by this news service on 10 September. As part of the process, Carlyle has engaged JP Morgan as its financial advisor, HSG has retained Deutsche Bank, EQT has mandated Barclays, and Boyu Capital is working with Morgan Stanley.

Boyu, Starbucks, Industrial Bank, Ping An Bank and Shanghai Pudong Development Bank did not immediately respond to requests for comment.