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Chinatrust stakes Nan Shan interest
By Faith Hung and Jonathan Standing |
September 22, 2010, Wednesday
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Print Edition
Print Edition
AIG is sure of at least one bidder for its Taiwan Nan Shan Life unit should it put it back on the market, with Chinatrust Financial reaffirming its interest yesterday after the original buyers pulled out.
China Strategic and Primus Financial, the original buyer group, formally ended their US$2.2 billion bid on Monday after Taiwan's regulators had blocked it at the end of August.
AIG is widely expected to put Nan Shan, Taiwan's No. 3 insurer by market share with NT$1.5 trillion (US$47 billion) in assets, back on sale as it seeks to repay United States government funds following its bailout during the global financial crisis.
"We want to, and need to know what AIG's next move will be," Chinatrust President Daniel Wu told Reuters.
"We would bid for Nan Shan by ourselves ... via either selling shares or bonds."
AIG's Taipei-based media relations company said yesterday that the insurer was "evaluating its options with respect to its ownership of Nan Shan."
China Strategic's Chief Executive Raymond Or told Reuters that it was too early to say whether it would consider bidding again, but said he would have to assess whether a fresh bid would have any chance of success.
"If there is no chance, then there is no point in spending time and money," Or said. "Currently, I would think it is better for China Strategic to move on."
Primus Financial declined to comment.
Last month, Taiwan regulators blocked the bid from China Strategic, a battery maker, and Hong Kong fund Primus, saying the two did not have experience in the insurance industry and lacked the ability to raise capital for future operations.
The buyers did not take the option of appealing the ruling, which lawyers said would have been unlikely to succeed.
The sale was the second failed attempt in Asia by AIG to sell assets to repay billions of US taxpayer dollars used to bail out the company.
In May, the US$35.5 billion sale of its American International Assurance unit to Britain's Prudential Plc fell through.
The US insurer now plans to list AIA in Hong Kong on October 29 in a US$15 billion float, the biggest ever in Hong Kong and also the biggest ever insurance float.
It was not likely to take that option for Nan Shan, analysts said.
"It would be in AIG's best interest to launch another bid," said an analyst at an European-based securities house. "An IPO of Nan Shan would simply take too much time and get too complicated."
In addition to Chinatrust, Fubon Financial Holding has expressed interest in buying Nan Shan.
Cathay Financial may also be interested, analysts have said.
A source with direct knowledge of the sale process told Reuters earlier this month that the island's regulators were unlikely to take issue with offers from Fubon or Cathay, either alone or with partners such as private equity companies.
But the regulators would be wary of a Chinatrust bid, because the firm, Taiwan's biggest credit card issuer, is heavily leveraged.
China Strategic and Primus Financial, the original buyer group, formally ended their US$2.2 billion bid on Monday after Taiwan's regulators had blocked it at the end of August.
AIG is widely expected to put Nan Shan, Taiwan's No. 3 insurer by market share with NT$1.5 trillion (US$47 billion) in assets, back on sale as it seeks to repay United States government funds following its bailout during the global financial crisis.
"We want to, and need to know what AIG's next move will be," Chinatrust President Daniel Wu told Reuters.
"We would bid for Nan Shan by ourselves ... via either selling shares or bonds."
AIG's Taipei-based media relations company said yesterday that the insurer was "evaluating its options with respect to its ownership of Nan Shan."
China Strategic's Chief Executive Raymond Or told Reuters that it was too early to say whether it would consider bidding again, but said he would have to assess whether a fresh bid would have any chance of success.
"If there is no chance, then there is no point in spending time and money," Or said. "Currently, I would think it is better for China Strategic to move on."
Primus Financial declined to comment.
Last month, Taiwan regulators blocked the bid from China Strategic, a battery maker, and Hong Kong fund Primus, saying the two did not have experience in the insurance industry and lacked the ability to raise capital for future operations.
The buyers did not take the option of appealing the ruling, which lawyers said would have been unlikely to succeed.
The sale was the second failed attempt in Asia by AIG to sell assets to repay billions of US taxpayer dollars used to bail out the company.
In May, the US$35.5 billion sale of its American International Assurance unit to Britain's Prudential Plc fell through.
The US insurer now plans to list AIA in Hong Kong on October 29 in a US$15 billion float, the biggest ever in Hong Kong and also the biggest ever insurance float.
It was not likely to take that option for Nan Shan, analysts said.
"It would be in AIG's best interest to launch another bid," said an analyst at an European-based securities house. "An IPO of Nan Shan would simply take too much time and get too complicated."
In addition to Chinatrust, Fubon Financial Holding has expressed interest in buying Nan Shan.
Cathay Financial may also be interested, analysts have said.
A source with direct knowledge of the sale process told Reuters earlier this month that the island's regulators were unlikely to take issue with offers from Fubon or Cathay, either alone or with partners such as private equity companies.
But the regulators would be wary of a Chinatrust bid, because the firm, Taiwan's biggest credit card issuer, is heavily leveraged.
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