AIA, the Asia life-insurance unit of AIG (AIG), has pointed out a few potential downside to its business as it gets ready to raise an estimated $15 billion in an initial public offering on the Hong Kong exchange.
The AIG subsidiary said that its failure to reach a deal with insurance firm Prudential to sell the company in its entirety could pose a business risk. AIG tried to sell AIA to Prudential for $35.5 billion, but Prudential tried to lower its offer for the company. AIG then rejected Prudential’s counteroffer of $30.4 billion. According to Reuters, the AIA IPO values the company at about $30.5 billion. AIA said in a prospectus for the Hong Kong IPO that the failed transaction could hinder agency recruitment and business production.
AIA also said it would not pay a dividend on its stock until at least 2011. The company is looking to sell 48.6 percent of itself on the Hong Kong exchange, according to a document obtained by Reuters.