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November 10, 2009

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AXA's Taikang stake attracts bidders

FRENCH insurer AXA's 15.6-percent stake in Taikang, China's No. 4 life insurer, attracted foreign and domestic bidders, including Temasek and Blackstone, valuing the holding at more than US$1 billion, sources said yesterday.

Other bidders included Bain Capital, KKR and two Chinese private equity firms, Hopu Investments and Hony Capital, according to sources with direct knowledge of the situation.

All bids were received by last Friday's first-round deadline. Sources previously said Morgan Stanley was the sellside adviser for the auction.

Last month, Morgan Stanley sent Taikang's book and bidding invitations to more than 30 private equity firms, while some, for example, the Carlyle Group, decided to walk away, according to the sources.

"The reaction is bigger than AXA expected," one source said. "When water rises, the boat rises with it. So the bidding price is also getting higher than expected now," he said.

AXA's efforts to sell off its stake in Beijing-based Taikang came as Europe's second-largest insurer announced plans to buy the Asian assets of its AXA Asia Pacific unit and raise 2 billion euros (US$3 billion) to pursue growth in the region.

AXA inherited the stake in Taikang in 2006 when it agreed to buy Swiss insurance company Winterthur. AXA had at one time valued Taikang at about US$100 million, one of the sources said.

In China, AXA also has AXA-Minmetals Assurance Co, a joint venture between AXA Group and China Minmetals Group.


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