Manulife Beefed Up Cash Reserves To Acquire AIG Philippines
Posted on March 10th, 2009
The battle to win the American International Group Inc’s assets in the Philippines continues as Manulife Financial Corp. is implementing measures to boost its liquidity by issuing additional preferred stocks to acquire fresh funds.
A total of 8 million preferred shares will be issued by the Toronto-based Manulife, these stocks are priced at $25 per share or gross proceeds of $200 million. And if underwriters RBC Capital Markets and CIBC World Markets purchase an additional three million shares, the total amount could rise by another $75 million.
Most companies are using the said strategy to boost reserves, but Manulife’s method is seen to be in preparation for the acquisition. Manulife submitted a bid of about US$1 billion for AIG’s Philippine life insurance ahead of yesterday’s deadline for offers. Should they win the bidding, Manulife will become the biggest life insurance company in the Philippines.
An investment banker in Hong Kong whose expertise is in the insurance sector said that Manulife is “in a fairly good position†to win the auction for AIG’s Philippine business, although he warned of a stiff competition for the AIG unit.
Among Manulife’s competition for the AIG business is a group led by Prudential Life of the U.K. and the Bank of the Philippine Islands. Prudential was even reported to have sold its Taiwanese operations which was seen as a move to free up capital for the acquisition
Another group vying for the AIG unit is led by Philippine’s Banco de Oro Unibank and Assicurazioni Generali SpA of Italy. The group’s advisors include Australia’s Macquarie Bank, Goldman Sachs and JPMorgan Chase & Co.
So at this point, with such formidable line-up of companies interested in the AIG Philippine’s business, there is still no way of telling who will win the bidding and finally acquire AIG Philippines.
