Update | Chinese insurance giant Anbang invites pitches from banks for possible Hong Kong IPO
Anbang Insurance Group Co., the Chinese owner of New York’s iconic Waldorf Astoria hotel, has asked banks to pitch for roles on a planned Hong Kong initial public offering next year, according to people with knowledge of the matter.
The Beijing-based insurance giant asked investment banks to submit proposals by the end of this week, said one of the people, who asked not to be identified because the information is private. The listing may include Anbang’s domestic life-insurance operations as well as many of its overseas businesses, two of the people said.
Anbang, led by Chairman Wu Xiaohui, is considering first raising funds through a pre-IPO private placement in the coming months, according to one person.
The proposed listing would be an important step forward for Anbang’s transparency, shedding some light on the insurer’s ownership structure while also providing an offshore war chest to fund further expansion.
Anbang has been the most active overseas dealmaker among Chinese insurers, announcing at least US$13.5 billion of acquisitions during the last two years, according to data compiled by Bloomberg.
“For an IPO of Anbang to succeed, it will need to carefully lay its strategy before investors and explain in detail the intended use of proceeds,” said Philippe Espinasse, the former head of Asia equity capital markets at Nomura Holdings Inc.
Chinese financial companies that listed in the city this year have gained an average 1.1 per cent from their offer prices when adjusted for deal size, according to data. Hong Kong first-time share sales have raised $9.7 billion in 2015, down from $20.1 billion for the same period last year, the data showed.
A representative for Anbang said he couldn’t immediately comment.
Last year, the Chinese insurer folded four of its overseas acquisitions into its Anbang Life Insurance Co. unit, including South Korea’s Tongyang Life Insurance Co., Dutch insurer Vivat NV and Belgian lender Banque Nagelmackers SA.
Consolidated net income at Anbang Life more than doubled from the previous year to 19.6 billion yuan (US$3 billion), while assets surged more than sevenfold to 921.6 billion yuan, according to its 2015 annual report.
“A Hong Kong IPO would give Anbang a good fundraising channel plus some fresh capital for business expansion, including deals,” Steven Lam, a Hong Kong-based analyst at Bloomberg Intelligence, said by phone Tuesday. “They may face some difficulty in pricing negotiation, as investors may be cautious with insurance companies given the falling interest rates.”
Anbang’s Wu formed ties with the family of Deng Xiaoping, one of the most revered Chinese leaders, after marrying Deng’s granddaughter, according to Caixin magazine.
Caixin has also reported links to the family of Chen Yi, a top military commander under Mao Zedong, as well as to relatives of former Premier Zhu Rongji.
The Chinese insurer was leading an investor group earlier this year that abruptly pulled a $14 billion takeover offer for Starwood Hotels & Resorts Worldwide Inc., clearing the way for an acquisition by Marriott International Inc.
Anbang agreed last November to buy US insurer Fidelity & Guaranty Life for $1.6 billion and this year reached a deal to purchase Strategic Hotels & Resorts Inc. from Blackstone Group LP for about $6.5 billion, data showed.
