Hong Kong: American International Group, the bailed-out insurer, is seeking as much as HK$115.3 billion ($14.9 billion, or Dh54.56 billion) in an initial public offering of its Asia unit in Hong Kong, two people with knowledge of the matter said.
The company plans to sell as many as 5.9 billion shares of AIA Group at HK$18.38 to HK$19.68 each, said the people, who declined to be identified because the discussions are private. The offering represents a stake of about 49 per cent of the company, the people said, which would value Hong Kong-based AIA at as much as $30.6 billion.
AIG is taking advantage of a gain in Hong Kong stocks to attempt what may become the city's biggest-ever IPO, moving it closer to repaying its $182.3 billion government bailout. The offering values AIA at a premium to European rivals, based on forecasts by the IPO arrangers. Investors "are probably more tempted by a valuation closer to $30 billion," said Christopher Wong, Singapore senior investment manager at Aberdeen Asset Management, which oversees $267 billion. "The offering is already factoring in pretty aggressive growth rates in an uncertain global operating environment."
New York-based AIG is taking the division public after Prudential backed out of a deal in June to pay $35.5 billion for AIA.
Option to sell scale up
AIG has an option to sell more shares in AIA, taking the potential size of the IPO to $20.5 billion, a term sheet for the transaction sent to fund managers showed. That would make it the largest ever in Hong Kong, overtaking the $16 billion raised by Beijing-based Industrial & Commercial Bank of China Ltd. in 2006, data compiled by Bloomberg show.