UPDATE:Nippon Life Leading Bidder To Buy AIG Japan HQ-Source
May 07 2009 - 9:56PM
Dow Jones News
Nippon Life Insurance Co. is seen as a leading bidder to buy
American International Group Inc.'s (AIG) Japan headquarters for
about Y100 billion, a person familiar with the matter said
Friday.
Japan's largest life insurer "is now in final talks" with AIG,
in which the U.S. government now owns an 80% stake, and an
agreement will likely be reached next week, the person said.
Mitsui Fudosan Co. (8801.TO) and Mitsubishi Estate Co. (8802.TO)
are also in the final round of bidding, another person familiar
with the situation said.
Earlier this week, AIG reported its sixth straight quarterly
loss and it has been actively working to restructure its operations
by selling off various assets and businesses.
The insurer has been in talks since February with real estate
developers and other financial institutions to sell the 15-story
building, which overlook the Imperial Palace and is one of Tokyo's
priciest pieces of commercial real estate. Blackstone PE fund is a
global advisor for AIG.
Less than 500 AIG employees work at its Japan headquarters, only
a fraction of the workers that AIG employs in Tokyo.
Faced with the impending need to sell off assets due to the
financial crisis, a number of financial institutions operating in
Japan have sold off their real estate holdings.
In March, Asahi Mutual Life Insurance Co. sold its headquarters
facing Tokyo Station to a special purpose company under Mitsubishi
Estate for around Y80 billion.
Despite a slowdown in the real estate transactions as many
foreign buyers are having trouble obtaining loans, Tokyo's property
market is still attractive to some investors due to rising
vacancies and falling land prices.
Large Japanese real-estate firms such as Mitsubishi Estate and
Mitsui Fudosan have some advantage as they can get loans more
easily from the nation's lenders.
-By Atsuko Fukase, (Tor Ching Li contributed to this story) Dow
Jones Newswires; 813-6895-7567; atsuko.fukase@dowjones.com