UPDATE: Primus Hopes To Resubmit Nan Shan Bid Next Week
(Adds more comments from interview, background on deal.)
By Ellen Sheng
Of DOW JONES NEWSWIRES
HONG KONG -(Dow Jones)- Primus Financial Holdings Ltd. and China Strategic
Holdings Ltd. (0235.HK), which American International Group Inc. (AIG) selected
to buy its Taiwan life insurance unit for US$2.15 billion, said Wednesday they
will send a revised application to Taiwan regulators on the acquisition "
hopefully next week."
Taiwan's Investment Commission last week turned down the consortium's
application to acquire the unit, Nan Shan Life Insurance Co., saying the group
didn't provide enough specifics about its funding sources or investors.
Critics of the deal have expressed concerns that the consortium is backed by
mainland Chinese money. Taiwan law prohibits mainland Chinese investment in the
island's financial institutions. Foreign companies are seen as Chinese-owned if
Chinese investors have a 30% stake in them.
Robert Morse, chairman and co-chief executive of Primus, said the group has
been working "hand in glove" with regulators to provide all the additional
information requested on the group's business plan, sources of funding and
capital structure.
The consortium has also been spending a lot of time with management, employees
and agents to assure them about their sources of funding and their intention to
make a long-term investment in Taiwan, Morse said.
Another factor complicating the acquisition's approval is the consortium's
agreement to sell a 30% stake in Nan Shan Life to Chinatrust Financial Holding
Co. (2891.TW) in exchange for a 9.95% stake in Chinatrust. That deal, announced
only weeks after Primus and China Strategic won the bid for Nan Shan Life,
sparked concerns about the consortium's long-term commitment.
Morse and China Strategic Chief Executive Raymond Or emphasized Wednesday the
two transactions are separate and the resubmitted Nan Shan Life application
won't include anything about Chinatrust.
"Chinatrust is a secondary transaction and not in the picture yet," said Or,
adding regulators haven't yet asked for additional information about Chinatrust.
Regulators could choose to approve the acquisition of Nan Shan Life by the
consortium, and either approve or not approve the Chinatrust transaction, Morse
said. Chinatrust's network would complement Nan Shan Life's business nicely, he
said, but it isn't necessary.
-By Ellen Sheng, Dow Jones Newswires; 852-2832-2336; ellen.sheng@dowjones.com
(END) Dow Jones Newswires
12-02-090032ET
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