China Pacific Insurance to raise up to $3.6 billion in IPO: report

China's third-largest life insurer by premiums, China Pacific Insurance Group Co (CPIC), is planning to raise up to $3.6 billion from a Hong Kong initial public offering (IPO) in what may be the second biggest share sale in Hong Kong this year.

According to a Bloomberg report today, citin people familiar with the matter, the Shanghai-headquartered CPIC and its stakeholders like the consortium led by private-equity fund Carlyle Group that has a 17.3-per cent stake, are offering a combined 861.3 million shares at HK$26.8 to HK$30.10 a share.

The offer values CPIC at a discount of at least 27 per cent to its two bigger competitors, based on estimates of embedded value by banks involved in the sale (Embedded value estimates a company's net worth excluding new business).

China International Capital Corp., Credit Suisse Group AG, Goldman Sachs Group Inc. and UBS AG are managing the sale. The stock is expected to start trading on 23 December.

The 861.3 million shares being sold represent a 10.2-per cent stake in the company, said Bloomberg. The share sale values China Pacific at 1.7 times to 1.9 times next year's embedded value as estimated by banks involved in the sale.

CPIC, which had initially planned to sell about 900 million shares by September 2008, was forced to shelve its plans following the global financial crisis.