UPDATE: Primus Back In Nan Shan Bid; Forming JV With Taiwan Secom, Goldsun
04 Janeiro 2011 - 6:04AM
Dow Jones News
Primus Financial Holdings Ltd. is once again bidding for
American International Group Inc.'s (AIG) Taiwan life-insurance
unit, this time with Taiwan Secom Co. (9917.TW) and Goldsun
Development & Construction Co. (2504.TW), both of which are
controlled by a prominent local family.
Hong Kong-based Primus' latest offer for Nan Shan Life Insurance
Co. comes after Taiwan's financial regulator rejected the company's
US$2.15 billion joint bid for Nan Shan with Hong Kong-listed China
Strategic Holdings Ltd. in August, citing concerns about China
Strategic's financial strength and commitment to Nan Shan.
Primus' new consortium joins Chinatrust Financial Holding Co.
(2891.TW), Cathay Financial Holding Co. (2882.TW), Ruentex Group
and Fubon Financial Holding Co. (2881.TW) in the race for Nan Shan,
whose large customer base makes it an attractive acquisition target
to firms looking to secure a bigger share of the island's crowded
insurance market.
AIG has been looking for a buyer for Nan Shan as it tries to
shed non-core assets and repay the funds received through a U.S.
government bailout during the financial crisis.
Primus' decision to bring in local partners backed by the
prominent Lin family, whose business interests include property
development, cement production and manufacturing of home security
devices, could help tip the balance in its favor this time around.
However, neither Taiwan Secom, a home security supplier, nor
Goldsun Development, a developer, have experience in the
life-insurance or financial-related industries, which could present
a hurdle.
Taiwan Secom's director Max Chu told Dow Jones Newswires on
Tuesday the three companies are in the process of setting up a
joint venture to formally bid for Nan Shan, and have already
expressed their interest in Nan Shan to AIG.
He added Taiwan Secom and Goldsun will jointly hold a
controlling stake in the venture. Chu declined to say how much the
venture will offer for Nan Shan.
Goldsun wasn't immediately available for comment. AIG
spokeswoman Lauren Day and a spokeswoman for Primus both declined
to comment.
The other known bidders for Nan Shan have offered between
US$2.20 billion and US$3.00 billion for Nan Shan, with Chinatrust
submitting the highest bid, a Taiwanese lawmaker said last week,
citing information from his contacts at the U.S. Treasury
Department.
Whether AIG's latest bid to sell its unit succeeds depends on
Taiwan's Financial Supervisory Commission. The FSC has said its
approval of a potential sale will depend on whether a buyer has
sound financing and insurance experience, will look after
policyholders and staff and make a long-term commitment to the
company, and can meet future funding needs.
Chinatrust, Cathay and Fubon already have insurance operations,
although the latter two are better capitalized. Ruentex lacks
significant experience operating an insurance company.
Nan Shan is the biggest foreign player in the island's insurance
market in terms of market share, a local banker who isn't involved
in the deal said earlier. The market's high penetration rate of
about 14% and low profit margins have prompted some foreign
investors to exit the island, the banker added.
-By Aries Poon, Dow Jones Newswires; 886-2-25022557;
aries.poon@dowjones.com
--Fanny Liu and Nisha Gopalan contributed to the article.
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