UPDATE: Chinatrust: Capable Of Buying, Integrating Nan Shan
August 18 2009 - 4:22AM
Dow Jones News
Chinatrust Financial Holding Co. (2891.TW) is capable of
acquiring and integrating American International Group Inc.'s (AIG)
Taiwan unit, Chinatrust Chief Investment Officer Daniel IK Wu said
Tuesday.
Chinatrust Financial is among the companies in the race to buy
AIG's Nan Shan Life Insurance Co., Taiwan's second-largest life
insurer by gross premiums after Cathay Life Insurance, in a deal
that will likely fetch US$2 billion, people familiar with the
matter have said.
Wu made the comment on Nan Shan at a news conference when asked
by Dow Jones Newswires if the company could integrate a company as
large as the AIG unit. He declined to elaborate.
Taipei-based Chinatrust, Taiwan's largest credit card issuer,
has around NT$1.73 trillion worth of assets, just slightly more
than Nan Shan's NT$1.5 trillion.
James Wu, a BNP Paribas based in Taipei, downgraded Chinatrust
to reduce from hold Monday, and lowered the company's share price
target to NT$15.90 from NT$18.40, saying Nan Shan is too big for
Chinatrust to manage.
"Chinatrust's management has limited hands-on experience of
insurers," Wu said in a report. "A small-scale insurer might
compliment the Chinatrust platform, but (Nan Shan) is too big for
the purpose."
Interested buyers are doing due diligence on Nan Shan before
they put in bids at the end of August, according to people with
knowledge of the matter. Bain Capital LLC, Oaktree Capital
Management LLC and Morgan Stanley's private-equity unit are in
talks with Chinatrust Financial on bidding for Nan Shan, other
people with knowledge of the matter said late July.
Wu also told reporters the company is looking beyond Asia for
expansion. In late June, Chinatrust Financial appointed Michael B.
DeNoma, a former group executive director of Standard Chartered
PLC, as the chairman of its Chinatrust Commercial Bank Co. in a bid
to expand overseas.
"Standard Chartered's expansion in the past few years was
amazing, and we would like to duplicate that...through a three- to
five-year development plan," Wu said.
-By Perris Lee Choon Siong, Dow Jones Newswires;
+8862-2502-2557; perris.lee@dowjones.com