HONG KONG American International Group (AIG.N) (AIG) is selling a stake in PICC House and Casualty Co Ltd (2328.HK) worth up to $ 1 billion to institutional investors by way of a block deal, cutting its shareholding in the Chinese state-owned insurer for the second time this year.
The U.S. insurer acquired a stake in PICC Home and Casualty as a cornerstone investor in 2003, ahead of the Chinese insurer’s flotation. The deal launched on Monday comes soon 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 business into 3..
AIG is providing amongst 355 million and 365 million PICC P&C shares in a variety of HK$ 16.08-HK$ 16.38 every, a term sheet of the deal showed. The simple provide is worth about $ 750 million, with a $ 250 million up-size option taking the total deal value to $ 1 billion, the terms showed.
The value range represents a discount of 4.three-6.1 percent to PICC Property’s last traded value.
AIG traces its roots to 1919 when Cornelius Vander Starr established a basic insurance coverage enterprise in Shanghai. Following the global economic crisis, AIG sold component of its Asian life insurance coverage enterprise AIA Group Ltd (1299.HK) by means of a $ 20.1 billion Hong Kong initial public offering (IPO) in 2010 to assist repay the U.S. government bail-out. More than 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 (1339.HK) IPO, reaffirming its commitment to the Asia Pacific region. Prior to Monday’s sell-down, AIG held 1.two billion PICC P&C shares, or about 26.4 percent stake of the firm, generating it the Chinese insurer’s biggest shareholder.
An AIG spokesman declined to comment.
Citigroup (C.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N) are managing the sale, the terms showed.
(Reporting by Fiona Lau at IFR and Denny Thomas Further reporting by Umesh Desai and Lawrence White Editing by Gopakumar Warrier and Louise Heavens)