US insurer AIG said it planned to press ahead with the Hong Kong initial public offering of its Asian unit despite a disappointing valuation of 28.5-30.5 billion US dollars, reports said Tuesday.
AIG had to drop its initial plan to sell shares in AIA at a level that would value the company at 35-37 billion dollars to secure the backing of the Kuwait Investment Authority and other cornerstone investors, the Financial Times said.
The insurer, which is looking to repay US taxpayers after a government bailout in 2008, is planning to float about half of AIA to raise up to 17.1 billion dollars, people familiar with the matter told the newspaper. A number of Hong Kong tycoons are among other big investors to have signed up for cornerstone stakes, according to the FT.
Last month, AIG won approval for a Hong Kong share sale of the Asian unit in what could be the world’s second-biggest initial public offering this year, Dow Jones Newswires said. An investor roadshow starts this week and the shares will be priced on October 21. AIA is expected to list on October 29.
AIG was forced to look again at the option of publicly floating AIA in Hong Kong after the collapse in June of Prudential’s 35.5-billion US dollar takeover bid. Agricultural Bank of China claimed the world’s biggest IPO in August when it confirmed it had raised 22.1 billion US dollars, after its shares debuted in Hong Kong in July.
Hong Kong, Oct 5, 2010 (AFP)
