Taipei, July 3, 2009 (CENS)--Nine parties had tendered bids for Nan Shan Life Insurance, the Taiwanese subsidiary of AIG Group of the U.S. and a leading player in the local insurance market, by the deadline yesterday (July 3), with the floor price for the bidding estimated at NT$80 billion, according to the Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (TEN).

The nine bidders include I-Mei Group, Ruentex Group, Cathay Financial Holding, Fubon Financial Holding, and Chinatrust Financial Holding, as well as four private-equity funds Carlyle Group, MBK Partners, KKR, and Primus.

After the ending of the deadline, the bidding operation will enter the second stage, when qualified bidders will undertake due-diligence investigation of Nan Shan. Subsequently, Nan Shan will enter talks with those with offers higher than the floor price. The operation is expected to conclude in August or September.

Insiders noted that the bottom line of the AIG Group for the deal is US$2 billion (or NT$66 billion) but potential winning bidders may have to offer at least 20-30% markup, boosting the price tag to NT$80-85 billion. Nan Shan boasts assets of NT$1.5 trillion.

An investment banker pointed out that AIG Group demands cash payment in entirety, excluding share swap, for the deal, assuring only those with enough deep pockets can take part in the contest. Therefore, winners may have to find partners for buying up Nan Shan, in order to avoid straining their finance.


(by Philip Liu)