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.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS