(Corrects company name in lead to American International
* 30 percent stake to cost $10 billion based on AIA
* AIG seeking pre-IPO investments from China - sources
(Adds details, background)
HONG KONG, Aug 16 A consortium of leading
Chinese companies including Industrial and Commercial Bank of
China Ltd (1398.HK)(601398.SS), China Life Insurance Co Ltd
(2628.HK) (601628.SS), plans to bid for a 30 percent stake in
American International Group Ltd's (AIG.N) Asian life insurance
business, AIA, the 21st Century Business Herald reported on
That would mean an investment of about $10 billion based on
AIA's estimated $30 billion value, which was what British
insurer Prudential Plc (PRU.L) last agreed to pay for AIA
before its bid collapsed earlier this year.
Bailed out insurer AIG is planning to list American
International Assurance (AIA) on the Hong Kong stock exchange
later this year, which could raise about $15 billion, sources
have previously told Reuters.
AIG was set to name Citigroup Inc (C.N), Deutsche Bank AG
(DBKGn.DE), Goldman Sachs Group Inc (GS.N) and Morgan Stanley
(MS.N) as joint global coordinators for the IPO, sources told
AIG and its advisers were seeking pre-IPO investments from
Chinese investors, sources told Reuters, declining to name
The Sources declined to be identified as they were not
authorised to speak to the media.
Pre-IPO stakes are usually sold at a discount to the IPO
valuation and that sets a benchmark for the public offering. A
large pre-IPO investment will make it easy for AIG and its
advisers to sell the rest of the offer to traditional
institutions and mutual funds.
During the negotiations, China Life called for a valuation
of $25-27 billion for AIA, compared with the $35.5 billion that
Prudential initially agreed to pay for AIA.
The report also said that if the consortium failed to get
the 30 percent stake it would not pursue an investment in AIA's
Large IPOs are commonly either supported by large pre-IPO
investments or cornerstone investors, as was the case with
Agricultural Bank of China Ltd's (1288.HK)(601288.SS) record
Other members of the consortium include Cinda Asset
Management Fosun Group, Hony Capital (an investment arm of
Legend Group, parent of Lenovo Group (0992.HK)), and
Alibaba.com Ltd 1688.HK, according to the newspaper.
An AIA spokesman could not immediately be reached for
comment. Banks and institutions mentioned in this report were
either not available for comment or declined to comment.
(Reporting by Denny Thomas and Kennix Chim; Editing by Chris