AIA Group, which aims to raise about $15bn (£9.4bn) through a Hong Kong listing, flagged a series of business risks including the collapsed bid from Prudential as it launched the share offering yesterday.
AIA, the Asian life insurance business of American International Group, also said in the preliminary prospectus filed to the Hong Kong Stock exchange that it would not pay a dividend before 2011.
AIG is planning to sell 48.6 per cent stake in AIA to raise up to $14.86bn, a document shows. The net proceeds will be used to repay financial aid AIG received from the US government.
AIG revived AIA’s IPO after Prudential cut its takeover offer for AIA to $30.4bn from $35.5bn.
In contrast, the IPO would value AIA at as much as $30.5bn.
“The terminated Prudential transaction also adversely impacted and may continue to adversely impact agency recruitment and new business production by our agents,” AIA said in its prospectus.
“We cannot assure you that our business and prospects will not be materially and adversely affected by the terminated Prudential transaction.”
AIA, an Asia-focused insurer, is selling 5.86bn secondary shares at an indicative price range of HK$18.38 (£1.50) to HK$19.68 per share.
Despite the red flags, there was a burst of demand for the shares yesterday, with demand equalling the number of shares on offer. The interest is likely to be because AIG has announced the on-again, off-again deal for so long that investors are already familiar with the company.
City A.M. Reporter