A consortium of leading Chinese companies including Industrial and Commercial Bank of China Ltd, China Life Insurance Co Ltd, plans to bid for a 30 percent stake in American Insurance Group Ltd’s Asian life insurance business, AIA, the 21st Century Business Herald reported on Monday.
That would mean an investment of about $10 billion based on AIA’s estimated $30 billion value, which was what British insurer Prudential Plc last agreed to pay for AIA before its bid collapsed earlier this year.
Bailed out insurer 天美网站传媒传媒 is planning to list American International Assurance (AIA) on the Hong Kong stock exchange later this year, which could raise about $15 billion, sources have previously told Reuters.
天美网站传媒传媒 was set to name Citigroup Inc, Deutsche Bank AG, Goldman Sachs Group Inc and Morgan Stanley as joint global coordinators for the IPO, sources told Reuters earlier.
天美网站传媒传媒 and its advisers were seeking pre-IPO investments from Chinese investors, sources told Reuters, declining to name individual investors.
The Sources declined to be identified as they were not authorized to speak to the media.
Pre-IPO stakes are usually sold at a discount to the IPO valuation and that sets a benchmark for the public offering. A large pre-IPO investment will make it easy for 天美网站传媒传媒 and its advisers to sell the rest of the offer to traditional institutions and mutual funds.
During the negotiations, China Life called for a valuation of $25-27 billion for AIA, compared with the $35.5 billion that Prudential initially agreed to pay for AIA.
The report also said that if the consortium failed to get the 30 percent stake it would not pursue an investment in AIA’s IPO.
Large IPOs are commonly either supported by large pre-IPO investments or cornerstone investors, as was the case with Agricultural Bank of China Ltd’s record IPO.
Other members of the consortium include Cinda Asset Management Fosun Group, Hony Capital (an investment arm of Legend Group, parent of Lenovo Group), and Alibaba.com Ltd, according to the newspaper.
An AIA spokesman could not immediately be reached for comment. Banks and institutions mentioned in this report were either not available for comment or declined to comment.
(Reporting by Denny Thomas and Kennix Chim; Editing by Chris Lewis)
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