PRIMUS JOINS WITH TAIWAN SECOM FOR NEW NAN SHAN OFFER

Home security company Taiwan Secom has signed a deal with Hong Kong-based investment company Primus to make a new offer for Taiwanese life operation Nan Shan, currently owned by AIG. The offer proposes that Taiwan Secom and AIG run the life business jointly, which would have an independent Taiwan listing. AIG has indicated that it would prefer an outright sale to an IPO, but Taiwan Secom director Max Chu said that theirs was a serious proposal. AIG's first attempt to sell Nan Shan – to Primus and China Strategic – was blocked by Taiwanese regulators, which had concerns that some of the backing for the takeover originated in mainland China, despite assertions from Hong Kong-listed China Strategic that this was not the case. In December a new set of bids – at levels higher than the initially accepted $2.15bn – was received from Cathay Financial, Chinatrust, Fubon and current market favourite Ruentex. Chinatrust Financial Holding was reported to have made the highest bid. Locally based Commercial Times cited an unnamed member of the Taiwanese legislature's Finance Committee in its report, claiming that Cathay Financial had bid $2.7bn, Ruentex had bid $2.5bn and Fubon Financial had bid $2.2bn. The lack of interest from Primus was something of a surprise, but it was clearly planning this "hybrid" offer that would enable AIG to raise cash while maintaining an equity interest in the new operation. Since the Taiwanese regulators have made little secret of the fact that they would prefer AIG to carry on running Nan Shan, possibly through an IPO that would transfer ownership to the domestic markets, a deal that would see AIG retaining a significant equity interest would probably be viewed in a favourable light. Taiwan Secom, which is partly owned by Japan-based Secom, would not say how much of a stake it wanted to buy.