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PICC to assess IPO demand in meeting
Source: Bloomberg News |
November 13, 2012, Tuesday
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Print Edition
Print Edition
PEOPLE'S Insurance Co (Group) of China, the nation's largest property insurer, plans to start meeting investors on Thursday to gauge demand for an initial public offering that may raise over US$3 billion in Hong Kong, two people with knowledge of the matter said.
The insurer, based in Beijing, is seeking a price that values the whole company at or above 125 billion yuan (US$20 billion), said the people, asking not to be identified as the information is private. That's a premium to the valuation PICC Group received in a sale to China's national Social Security Fund last year, they said.
The IPO may account for about 16 percent of PICC Group's enlarged share capital, the people said. The size of the stake has not been finalized, they said. The Social Security Fund acquired 11.3 percent of PICC Group for 10 billion yuan in June last year, said a statement on the fund's website. That transaction values the insurer at about 90 billion yuan.
Achieving the higher valuation may be difficult given a slump in Hong Kong's IPO market this year, the people said. Instead a final valuation of below US$19 billion is more probable, one person said.
PICC Group expects a premium to the 90 billion yuan valuation because the national pension fund bought its shares at a discount, the people said. The higher valuation also reflects the company's growth in the past year, they said.
The sale would be Hong Kong's largest IPO this year, where companies have raised just US$2.9 billion so far, according to data compiled by Bloomberg News. That excludes share sales by companies already listed in Shanghai or Shenzhen.
The insurer, based in Beijing, is seeking a price that values the whole company at or above 125 billion yuan (US$20 billion), said the people, asking not to be identified as the information is private. That's a premium to the valuation PICC Group received in a sale to China's national Social Security Fund last year, they said.
The IPO may account for about 16 percent of PICC Group's enlarged share capital, the people said. The size of the stake has not been finalized, they said. The Social Security Fund acquired 11.3 percent of PICC Group for 10 billion yuan in June last year, said a statement on the fund's website. That transaction values the insurer at about 90 billion yuan.
Achieving the higher valuation may be difficult given a slump in Hong Kong's IPO market this year, the people said. Instead a final valuation of below US$19 billion is more probable, one person said.
PICC Group expects a premium to the 90 billion yuan valuation because the national pension fund bought its shares at a discount, the people said. The higher valuation also reflects the company's growth in the past year, they said.
The sale would be Hong Kong's largest IPO this year, where companies have raised just US$2.9 billion so far, according to data compiled by Bloomberg News. That excludes share sales by companies already listed in Shanghai or Shenzhen.
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