More than nine interested parties have expressed their interest in bidding for Nan Shan Life Insurance Co (南山人壽), sources said yesterday.
The wide interest in Nan Shan Life, which is 97.5 percent owned by the financially troubled American International Group Inc (AIG), is likely to drive its price up to nearly NT$80 billion (US$2.43 billion) from the US insurer’s floor price of US$2 billion, a source said.
The deal is expected to close in September.
PHOTO: Liao Chien-ying, TAIPEI TIMES
“Some of the interested parties may have formed joint ventures to submit a joint bid,” he said.
Among the contenders, Chinatrust Financial Holding Co (中信金控) is probably the most suitable candidate since it lacks an insurance subsidiary, an analyst who requested anonymity said.
Nan Shan has hired Morgan Stanley, which has a 4.01 percent stake in Chinatrust Financial, to arrange its sales, the analyst said.
“But I don’t think it will be a good deal if the price [for Nan Shan] closes at around NT$80 billion,” the analyst said.
Although Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) — already the two largest domestic life insurers — have both expressed an interest in Nan Shan, the analyst said the two were likely to back out because of the lack of synergy as well as the risk and cost of managing overlapping policyholders and agents from Nan Shan.
The analyst said potential buyers should “be aware” that purchasing Nan Shan would be the “easy” part, but managing it would be “difficult.”
He added that share dilution and possible layoffs of Nan Shan’s “costly” agents were two hot potatoes that would likely keep Fubon Financial and Cathay Financial out of the deal.
Nan Shan has a sales force of about 35,000 serving 4 million policyholders. It has 24 branches and 427 sales offices nationwide.
Other potential contenders include Ruentex Group (潤泰集團) and private equity (PE) funds such as Carlyle Group, Primus Financial Holdings Ltd, MBK Partners Ltd, KKR & Co and Affinity Equity Partners Ltd, the source said yesterday.
Local media speculated that Ruentex could team up Carlyle or BlackRock Inc to compete head-to-head with Chinatrust Financial.
However, Financial Supervisory Commission Chairman Sean Chen (陳冲) said the financial regulator “does not welcome PE fund buyers if they are aiming for quick gains [out of the deal]” rather than long-term holding.
But he added that not all PE funds were vultures and his commission would take the prospective buyer’s track record into consideration when reviewing their applications.
Although the banker-turned chairman doesn’t object to the idea of PE funds borrowing loans from local banks to buy up Nan Shan, he advised local banks to carefully evaluate the credit risk of extending such loans.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”
HIGH-TECH: As leading-edge process technologies become more complicated, only a handful of players are able to provide design services, the company’s CEO said Artificial intelligence (AI) chip designer Alchip Technologies Ltd (世芯) yesterday said that revenue would grow significantly again in 2026 after adding a major AI chip customer, reversing moderation amid a product transition next year. The Taipei-based application-specific IC (ASIC) designer reiterated its strong revenue growth forecast for this year and 2026 after its stock plummeted about 23 percent to NT$3,145 from a peak of NT$4,085 on March 6 amid growing competition. Alchip said it has built strong partnerships with cloud service providers (CSP), denying that it had lost orders to smaller competitors such as Faraday Technology Corp (智原). Faraday said it has secured