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AIG hopes to raise US$6.5b by selling remaining stake in AIA
Source: Agencies |
December 18, 2012, Tuesday
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Print Edition
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AMERICAN International Group Inc may raise as much as US$6.5 billion from the sale of its remaining stake in AIA Group Ltd in Asia's second-largest block sale ever, exiting a business the United States insurer helped found nearly 100 years ago.
AIG is offering its 13.69 percent stake in AIA, or 1.65 billion shares, in a range of 29.65 Hong Kong dollars (US$3.826) to HK$30.65 apiece, sources with direct knowledge of the plan said.
That is a discount of up to 6.3 percent to AIA's close at HK$31.65 in Hong Kong last Friday, the sources said, declining to be identified as the terms of the offering weren't yet public. Trading of AIA was suspended yesterday at its request.
The sale marks the end of an era for AIG in Asia and its Chief Executive Robert Benmosche, who took AIA public in Hong Kong in the world's third-biggest initial public offering ever.
AIG was forced to sell parts of its massive business after the US government bailed the company out in 2008 as it teetered on the brink of collapse. The US ultimately spent US$182 billion on the rescue. AIA was one of the assets it put up for sale.
Since AIA's US$20.5 billion IPO, its shares have soared about 61 percent and become a top choice of fund managers looking to benefit from growing wealth in Asia and booming demand for insurance and other financial products.
The widely expected block offering of Asia's third-biggest insurer will be surpassed only by Vodafone Plc's US$6.6 billion stake sale in China Mobile two years ago. The offering also comes one week after a lockup on the shares expired, adding to two other rounds of AIA share sales earlier this year that had raised about US$8 billion in total.
Deutsche Bank AG and Goldman Sachs Group Inc were hired as joint global coordinators for the offering, with Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley also acting as bookrunners.
AIG, which expects to use the net proceeds from the AIA sale for general corporate purposes, said earlier yesterday that it had commenced a sale of the shares in Hong Kong by placing them to certain institutional investors. AIG did not identify the potential buyers or disclose the terms of the offering.
After selling US$2.02 billion in AIA shares in September, AIG was barred from selling any further shares until December 10. The company had raised US$6 billion from its first selldown in AIA in March.
AIG's exit from AIA has forced the US insurer to strike out on its own in Asia, where it is focusing its attention on China. AIG became the biggest cornerstone investor in the US$3.6 billion IPO of People's Insurance Company (Group) of China (PICC), also inking a joint venture to sell life insurance in the world's second-largest economy.
AIA's 2010 IPO came after a failed takeover offer from Prudential Plc.
AIG's business was started in Shanghai in 1919 by US entrepreneur CV Starr.
AIG is offering its 13.69 percent stake in AIA, or 1.65 billion shares, in a range of 29.65 Hong Kong dollars (US$3.826) to HK$30.65 apiece, sources with direct knowledge of the plan said.
That is a discount of up to 6.3 percent to AIA's close at HK$31.65 in Hong Kong last Friday, the sources said, declining to be identified as the terms of the offering weren't yet public. Trading of AIA was suspended yesterday at its request.
The sale marks the end of an era for AIG in Asia and its Chief Executive Robert Benmosche, who took AIA public in Hong Kong in the world's third-biggest initial public offering ever.
AIG was forced to sell parts of its massive business after the US government bailed the company out in 2008 as it teetered on the brink of collapse. The US ultimately spent US$182 billion on the rescue. AIA was one of the assets it put up for sale.
Since AIA's US$20.5 billion IPO, its shares have soared about 61 percent and become a top choice of fund managers looking to benefit from growing wealth in Asia and booming demand for insurance and other financial products.
The widely expected block offering of Asia's third-biggest insurer will be surpassed only by Vodafone Plc's US$6.6 billion stake sale in China Mobile two years ago. The offering also comes one week after a lockup on the shares expired, adding to two other rounds of AIA share sales earlier this year that had raised about US$8 billion in total.
Deutsche Bank AG and Goldman Sachs Group Inc were hired as joint global coordinators for the offering, with Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley also acting as bookrunners.
AIG, which expects to use the net proceeds from the AIA sale for general corporate purposes, said earlier yesterday that it had commenced a sale of the shares in Hong Kong by placing them to certain institutional investors. AIG did not identify the potential buyers or disclose the terms of the offering.
After selling US$2.02 billion in AIA shares in September, AIG was barred from selling any further shares until December 10. The company had raised US$6 billion from its first selldown in AIA in March.
AIG's exit from AIA has forced the US insurer to strike out on its own in Asia, where it is focusing its attention on China. AIG became the biggest cornerstone investor in the US$3.6 billion IPO of People's Insurance Company (Group) of China (PICC), also inking a joint venture to sell life insurance in the world's second-largest economy.
AIA's 2010 IPO came after a failed takeover offer from Prudential Plc.
AIG's business was started in Shanghai in 1919 by US entrepreneur CV Starr.
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