AIG to offload remaining stake in AIA for US$6.5b
American insurer expected to quit 93-year association with HK-listed company in move seen as boosting prospects for local the firm
American International Group (AIG) plans to sell its remaining stake in Hong Kong-listed insurer AIA to raise up to US$6.5 billion, marking the end of the US financial group's almost century-old association with the Asian insurer.
According to a term sheet obtained by the South China Morning Post, AIG will sell its entire 13.69 per cent of AIA, or 1.65 billion shares, to selected institutional investors in the price range of HK$29.65 to HK$30.65 per share. This represents a discount of 3.2 per cent to 6.3 per cent from AIA's last close, HK$31.65, on Friday. The company suspended trading yesterday.
Deutsche Bank and Goldman Sachs are the joint global co-ordinators on the offering.
"This should be good news for AIA as investors have always worried that AIG would dispose of its stake in the Hong Kong-listed insurer to repay the bailout money it received from the US government," said Louis Tse Ming-kwong, director of VC Brokerage.
"With AIG now planning to sell its remaining stake in AIA, it removes all uncertainties and would boost the prospects for AIA."
Another broker, who did not want to be identified, said the offer was attractive as AIA had a profitable business in Asia.