Bain Capital LLC, Morgan Stanley’s private equity unit, and Oaktree Capital Management LLC plan to bid together with Chinatrust Financial Holding Co (中信金控) for American International Group Inc’s (AIG) Taiwan unit, three people with knowledge of the matter said.
The companies would bid against Carlyle Group, which is partnering with Fubon Financial Holding Co (富邦金控) for the next round of offers scheduled for late next month, the people said, asking not to be identified because the talks are confidential.
AIG hired Morgan Stanley and Blackstone Group LP to manage the sale.
AIG’s advisers last week asked buyout firms to team up with Fubon or Chinatrust to ease regulatory concerns about the sale of the nation’s second-biggest insurer, Nan Shan Life Insurance Co (南山人壽), to private-equity firms.
AIG owns 97.57 percent of the unit and Nan Shan’s management holds the rest. Nan Shan may fetch about US$2 billion in the sale, the people said earlier.
The company has 4 million policyholders and an 11 percent market share in terms of premiums.
Primus Financial Holdings Ltd and Cathay Financial Holding Co (國泰金控) have also been invited to put in binding bids next month, the people said.
“The regulator wants the domestic companies to be in the driving seat,” said Chuang Piyen, a Taipei-based analyst at Mega Securities Co (兆豐證券). “The buyout firms are likely to be passive investors contributing capital to help the local partner bid.”
Morgan Stanley, which owns 4.8 percent of Chinatrust, won approval last month to boost the stake to 9.9 percent through its Asia private-equity unit. The unit teaming up with Chinatrust’s investing group may conflict with Morgan Stanley’s role as AIG’s sale adviser, according two rival bidders who asked not to be identified.
Primus Financial hired The Boston Consulting Group to work on a strategic business plan for Nan Shan and plans to allocate at least 5 percent to 10 percent of the company’s shares to the management and staff should it acquire the Taiwan insurer, a bid document obtained by Bloomberg News showed.
The financial services company, which has raised more than US$1 billion this year, also plans to expand Nan Shan’s scope of services to Hong Kong and China, the letter said.
The setup of groups bidding for Nan Shan may change, the people said.
The Financial Supervisory Commission has said it wants a buyer of Nan Shan to have experience in insurance.