ÌìÃÀÍøÕ¾´«Ã½´«Ã½

American International Group’s protracted sale of its Taiwan unit was further complicated Tuesday when a local company proposed buying a stake in the insurer, an offer that may please regulators but runs counter to ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s plans.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ has been trying for 15 months to sell its Nan Shan Life unit in Taiwan, and actually had a deal to sell the business last year for $2.15 billion. But local regulators blocked the deal and ÌìÃÀÍøÕ¾´«Ã½´«Ã½ was forced to put it back up for sale.

The New York-based insurer got four offers for the business in the latest round, but on Tuesday home security company Taiwan Secom Group proposed to buy a stake of Nan Shan and jointly run it with ÌìÃÀÍøÕ¾´«Ã½´«Ã½. Taiwan Secom would expect to list the unit in Taiwan.

A spokesman for Taiwan Secom later told Bloomberg News that his company could also bid with partners for all of Nan Shan, rather than just part of it.

Taiwan regulators have previously suggested a Taiwan listing but ÌìÃÀÍøÕ¾´«Ã½´«Ã½ has said it wants to sell the unit to another company, to increase the chances of its doing a deal quickly.

The sale of Nan Shan is part of ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s recapitalization plan, which is expected to close soon and will leave the U.S. Treasury with a 92.1 percent stake in the company.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ declined to comment. ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Chief Executive Bob Benmosche, who is undergoing aggressive chemotherapy for cancer, personally went to Taiwan last month to discuss the sale criteria with regulators.

‘BEING SERIOUS’
Taiwan Secom, partly owned by Japan’s Secom and an affiliate of cement firm Goldsun, is setting up a holding company with Hong Kong investment firm Primus Financial to acquire a stake in Nan Shan, said Max Chu, a director of Taiwan Secom.

“We are being serious. We are not just looking around,” he said, adding Taiwan Secom did not participate in the first round of bidding that ÌìÃÀÍøÕ¾´«Ã½´«Ã½ held last month.

Regulators have left it up to ÌìÃÀÍøÕ¾´«Ã½´«Ã½ to decide on what it wants to do with Nan Shan and are waiting for ÌìÃÀÍøÕ¾´«Ã½´«Ã½ to come up with a preferred bidder.

The regulator has set five conditions for any buyer. Those are that any buyer needs to show fund-raising ability for future operations, a long-term commitment to run Nan Shan and experience in running an insurance business, and must promise to take care of employees and policy holders and must have funding sources that meet Taiwan regulations.

A first deal to sell the unit to Primus and Hong Kong listed China Strategic was rejected after regulators said it did not meet all those conditions.

“ÌìÃÀÍøÕ¾´«Ã½´«Ã½ is the only one that’s making rules of the game,” said an official of one of the four Taiwanese companies that had submitted bids. “They still have not told us what is coming up next.”

Nan Shan is Taiwan’s No. 3 insurer by market share after the insurance arms of Cathay and Fubon and has assets of T$1.7 trillion ($56.5 billion). It lost T$12.7 billion in the second quarter of this year and T$12.5 billion in the third.

Taiwan Secom shares slipped 0.5 percent and Goldsun was off 1.8 percent, while the broader market was down 0.3 percent.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ shares fell 2.3 percent to $56.74 in morning trading, making them by far the biggest decliner among S&P insurance shares.

($1=T$29.1)

Topics ÌìÃÀÍøÕ¾´«Ã½´«Ã½