Sources Say Demand Hints AIA IPO Pricing Near Top End

October 21, 2010

American International Group Inc is expected to price its up to $20.5 billion AIA Group IPO near the top end of the indicative range, sources with direct knowledge of the matter told Reuters on Thursday.

The IPO generated more than $200 billion in demand from institutional investors, sources said.

The 10 times oversubscription level included repeat orders from investors on worries that their allotment could be scaled back due to excess demand.

AIG, which set a marketing range of HK$18.38-HK$19.68 each for the IPO, is raising money to repay the financial aid it received from the U.S. government during the financial crisis.

The pricing meeting is scheduled to start at 6:00 p.m. New York time (2200 GMT) on Thursday, where AIG will also decide whether to exercise the up-size option, one of the sources said.

Including the up-size and green shoe options, the AIA IPO is set to raise up to $20.5 billion, placing it on course to be the third-biggest IPO ever. That will leave AIG with a 33 percent stake in its Asian life insurance business, AIA.

Sources were not authorized to speak to media about the pricing. An AIA spokeswoman was not available for an immediate comment.

(Reporting by Kennix Chim, Clare Baldwin and Denny Thomas; Editing by Jacqueline Wong)

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