The buyer of AIG's Taiwan unit Nan Shan Life should run it for at least seven years, the island's financial regulators said on Tuesday, indicating there will be no swift exit for any buyer.
We do not welcome those seeking quick profits in the short term, Sean Chen, chairman of the Financial Supervisory Commission, told reporters.
Three bidders for Nan Shan offered less than $1.5 billion each, far below the $2 billion the U.S. insurer had expected, sources close to the companies said on Friday.
Among the three, the joint bid by investment firm Primus Financial and Hong Kong battery maker China Strategic was one of the highest at between $1.2 billion and $1.3 billion, sources said.
If PE (private equity) funds have an attitude to run Nan Shan for the long term, that would be fine, Chen said. We think seven years would be a long term when it comes to run an insurance firm.
The low-ball bids might scuttle the unit's sale, based on comments made by Robert Benmosche, who on August 10 was named American International Group's new chief executive officer.
In an interview with Reuters last Wednesday, Benmosche said he did not favor shedding assets at any price.
The other two bidders for Nan Shan were Taiwan's Cathay Financial and a consortium of Carlyle Group CYL.UL and Taiwanese partner Fubon Financial, sources have said.
Chinatrust Financial, Taiwan's top credit card issuer, also had submitted a bid for Nan Shan, though no detail on its offer was available.
(Reporting by Rachel Lee; Writing by Faith Hung; Editing by David Holmes)