The Banking and Strategy Initiative

Chillin' out till it needs to be funded

One more bidder withdraws from AIG unit bid? |

The recent laundry list of asset sales planned by AIG (see here) continues to find conflict of interest in almost each of its deals, as AIG remains the buck stopper of the entire industry’s claims good or bad..

Bloomberg reports that Morgan Stanley’s (NYSE:MS) private equity fund pulled out of the bidding group Chinatrust Financial Holding Co. is leading. Morgan Stanley’s private equity fund apparently dropped out of the bidding due to a perceived conflict of interest because Morgan Stanley is advising and funding costs for AIG and the sale of the Nan Shan Life Insurance Co. auction along with Blackstone Group LP (NYSE:BX). Morgan Stanley owns 9.9% of Chinatrust.

So is Chinatrust still in the bidding? It was in a bidding group that also included Bain Capital LLC and Oaktree Capital Management LLC, according to the Bloomberg report. Reuters reports that Chinatrust may still ready to bid.

“We are capable of running Nan Shan,” said chief investment officer Daniel Wu in response to questions from reporters. “But I’m not going to say if we have an interest (in acquiring it) or anything else.”

The sale of the unit is expected to bring in about $2 billion, but it could have trouble hitting that price target as the unit is under as much financial pressure as its parent. Nan Shan was forced to raise $1.45 billion in a rights offer last year to avoid slipping below a regulatory capital requirement as unprofitable policies eroded its reserves.

So who else is in the bidding for the unit?

Carlyle Group, which joined Fubon Financial Holding Co.

Cathay Financial Holding Co.

China Strategic Holdings Ltd. may have joined Primus Financial Holdings Ltd.

Binding offers are due for submission on Aug. 28, according to the reports. – Maria Woehr

via Morgan Stanley, ChinaTrust to drop AIG unit bid? (Dealscape – Private capital).


This entry was posted on August 19, 2009 by in Financial Markets, Global, Meltdown, TARP, US and tagged , , , , , , .


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