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The
U.S. insurer acquired a stake in PICC Property and Casualty as a
cornerstone investor in 2003, ahead of the Chinese insurer's
flotation. The deal launched on Monday comes after AIG raised
$500 million by selling down its PICC P&C stake in March.
The planned sale also comes as AIG faces pressure from
billionaire activist investor Carl Icahn to split the company
into three..
AIG is offering between 355 million and 365 million PICC P&C
shares in a range of HK$16.08-HK$16.38 each, a term sheet of the
deal showed. The basic offer is worth about $750 million, with a
$250 million up-size option taking the total deal value to $1
billion, the terms showed.
The price range represents a discount of 4.3-6.1 percent to PICC
Property's last traded price.
AIG traces its roots to 1919 when Cornelius Vander Starr
established a general insurance business in Shanghai. Following
the global financial crisis, AIG sold part of its Asian life
insurance business AIA Group Ltd <1299.HK> through a $20.1
billion Hong Kong initial public offering (IPO) in 2010 to help
repay the U.S. government bail-out. Over a period of time, AIG
fully exited from AIA.
But in 2013, AIG invested about $500 million in People Insurance
Group of China Co Ltd IPO, reaffirming its commitment to
the Asia Pacific region. Prior to Monday's sell-down, AIG held
1.2 billion PICC P&C shares, or about 26.4 percent stake of the
company, making it the Chinese insurer's biggest shareholder.
An AIG spokesman declined to comment.
Citigroup, Goldman Sachs and Morgan Stanley are managing the
sale, the terms showed.
(Reporting by Fiona Lau at IFR; and Denny Thomas; Additional
reporting by Umesh Desai and Lawrence White; Editing by
Gopakumar Warrier and Louise Heavens)
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