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High Asking Price May Threaten AIG’s Taiwan Sale

AIG has planned to seek about $2 billion for Nan Shan Life

AIG’s plan to sell its Taiwan insurance unit at a high asking price could ruin the bidding of the unit. AIG has planned to seek about $2 billion for Nan Shan Life – reported Reuters.

The Taiwan unit’s net assets could be worth as much as 40% below the T$100 billion ($3 billion) that AIG claims. The bidders are re-evaluating the situation and some could walk away due to disagreements over the price and lack of information provided by the seller.

In June, the Nan Shan sale initially attracted more than a dozen potential buyers including leading US firm JC Flowers, but less than half of them decided to go forward with a formal bid.

Last month, two US buyout funds, the Carlyle Group and Bain Capital, were selected by AIG and Taiwan regulators to enter the second round of bids. Carlyle is partnering Fubon Financial, parent of Taiwan’s insurer, while Bain has teamed up with Chinatrust Financial, a Taiwan-based issuer, for the bid.

Primus Financial, a firm led by former top Citi banker for Asia, Robert Morse, also made it to the second-round and has teamed up with Hong Kong investor China Strategic to fund its bid. Cathay Financial is also in the race.

AIG isn’t the only one looking for a high price for Nan Shan. Taiwan’s financial regulator is also aiming to keep Nan Shan’s price high, concerned about a negative backlash if people think the asset is being sold at a fire-sale price.