Dah Sing gets five bids for insurance unit, top offer about $1.3 bln -sources

Dah Sing Financial Holdings

12/05/2016 10:27

* Highest bid at around $1.3 bln -sources 
    * At least five suitors have placed final bids -sources 
    * Insurance unit earned HK$325 mln profit in 2015 
 
    By Denny Thomas 
    HONG KONG, May 12 (Reuters) - Dah Sing Financial Holdings 
Ltd  0440.HK  has received at least five bids for its life 
insurance unit, including offers from Canada's Sun Life 
Insurance Inc  SLF.TO  and Chinese property developer Country 
Garden Holdings Co  2007.HK , people familiar with the matter 
said. 
    The highest bid in the final round for the insurance 
business of one of Hong Kong's last remaining family-run banks 
was close to HK$10 billion ($1.3 billion), about 30 percent more 
than initially expected, they said, declining to be identified 
disclosing confidential information. 
    China Taiping Insurance Holdings Co Ltd  0966.HK , unlisted 
Qian Hai Life Insurance Co Ltd and Beijing-based investment firm 
J.D. Capital also put in bids, they added. 
    It was not immediately clear who submitted the top offer.  
One person said it was about 25 percent bigger than the next 
highest bid. A winner is likely to be announced next month, the 
people added. 
    The unit represents an attractive way for a traditional 
insurer to expand sales of its products using Dah Sing's network 
of 70 branches in Hong Kong, Macau and on the mainland. Other 
suitors not currently in insurance are keen to diversify away 
from their slowing home market, the people said. 
    Insurance businesses in Hong Kong have generated strong 
interest. Last year J.D. Capital bought Ageas'  AGES.BR  Hong 
Kong operations for about $1.4 billion.  urn:newsml:reuters.com:*:nL4N11507H. 
    Sun Life, Country Garden, Qian Hai and China Taiping 
Insurance declined to comment. A representative for J.D. Capital 
could not be reached for a comment. 
    Dah Sing said in an email that it was reviewing strategic 
alternatives for its life insurance business but that no 
decision had been made and no timetable had been set. 
    The sale had attracted over two dozen suitors but many 
traditional insurers dropped out, unable to match aggressive 
offers from other bidders, the people added. 
    Dah Sing's insurance business has an embedded value of about 
$500 million, one of the people said. Embedded value is the net 
asset value of an insurer plus the present value of potential 
future profits from existing life and health insurance 
contracts. 
    Dah Sing's insurance business reported a 29 percent rise in 
net profit in 2015 to HK$325 million.  
    Hong Kong has a developed life insurance market, with a life 
and health insurance premium to GDP ratio of 13.4 percent in 
2015, the second-highest in Asia, according to Swiss Re. 
Premiums are forecast to grow 9.2 percent in 2016. 
   ($1= 7.7593 Hong Kong dollars) 
 
 (Reporting by Denny Thomas; Additional reporting by Tris Pan, 
Sumeet Chatterjee and Clare Jim; Editing by Edwina Gibbs) 
 ((denny.thomas@thomsonreuters.com; +852 2843 6358; Reuters 
Messaging: denny.thomas.thomsonreuters.com@reuters.net)) 
 
Keywords: DAH SING INSURANCE/SALE