* AXA's Taikang sale gets both Chinese and foreign bidders
* AXA's Taikang sale is now valued at more than $1 billion
* All bids came in by last Friday's first-round deadline
(Adds more details, sources' quotes, industry background)
By George Chen and Michael Flaherty
HONG KONG, Nov 9 French insurer AXA's (AXAF.PA)
15.6 percent stake in China's No.4 life insurer, Taikang,
attracted foreign and domestic bidders including Temasek and
Blackstone (BX.N), valuing the holding at more than $1 billion,
sources told Reuters on Monday.
Other bidders included Bain Capital, KKR [KKR.UL] and two
Chinese private equity firms, Hopu Investments and Hony
Capital, according to sources with direct knowledge of the
All bids were received by last Friday's first-round
deadline. Sources previously told Reuters that Morgan Stanley
(MS.N) was the sellside adviser for the auction.
Last month, Morgan Stanley sent Taikang's book and bidding
invitations to more than 30 private equity firms, while some,
for example, the Carlyle Group [CYL.UL], decided to walk away,
according to the sources.
"The reaction is bigger than AXA expected," said one
"When water rises, the boat rises with it. So the bidding
price is also getting higher than expected now," he said.
AXA's efforts to sell off its stake in Beijing-based
Taikang came as Europe's second-largest insurer announced plans
to buy the Asian assets of its AXA Asia Pacific AXA.AX unit
and raise 2 billion euros to pursue growth in the region.
AXA inherited the stake in Taikang in 2006 when it agreed
to buy Swiss insurance company Winterthur. AXA had at one time
valued Taikang at around $100 million, one of the sources said.
In China, AXA also has AXA-Minmetals Assurance Co Ltd, a
51/49 joint venture between AXA Group and state-owned China
Minmetals Group, which has no relation to Taikang, and AXA
plans to invest more in AXA-Minmetals to expand its insurance
coverage to more Chinese cities, said the sources.
Morgan Stanley, Blackstone, KKR, Bain, Temasek [TEM.UL] and
Hopu declined to comment. Hony and AXA could not be immediately
reached for comment.
Foreign private equity funds have previously made forays
into China's insurance business.
In 2005, a Carlyle-led consortium bought a 25 percent stake
in China Pacific, the country's No.3 life insurer, for $409
Shanghai-listed China Pacific is preparing a Hong Kong
listing this year, allowing Carlyle to exit from its
investment. [ID:nSP383297] Taikang has also said it plans to go
public, without giving a specific timeframe.
Blackstone's Greater China chairman Antony Leung is leading
the team bidding for the AXA stake, said the sources.
Leung helped Singapore's DBS Group Holdings Ltd (DBSM.SI)
bid for control of China's Guangdong Development Bank in 2005,
a $3.1 billion deal eventually won by Citigroup Inc (C.N), the
Hopu is an influential China-focused private equity firm
run by top dealmaker Fang Fenglei, who helped Wall Street bank
Goldman Sachs (GS.N) set up its landmark China investment
banking joint venture. Hopu's main investors include
Singapore's state investor Temasek and Goldman Sachs.
Hony is an investment arm of China's top PC maker, Legend
Holdings, who's listed arm is Lenovo Group Ltd (0992.HK).
(Additional reporting by Narayanan Somasundaram in Hong Kong
and Saeed Azhar in Singapore; Editing by Lincoln Feast)