Richard Li has lodged an indicative bid for the south-east Asian businesses of ING’s $6bn Asian insurance operations, which the Dutch financial group is selling after taking government bailout cash during the financial crisis.
The younger son of Asia’s wealthiest tycoon, Li Ka-shing, is a surprise entrant to the field of bidders, which had been thought to include only strategic interest from insurance companies looking to boost their presence in Asia.
The majority owner of PCCW, the media and telecoms company, has been given a boost by a pledge from his tycoon father that he will financially back his son’s business ventures, giving Richard Li access to extra firepower.
Richard Li has three main business interests – telecoms, property and financial services – according to one close adviser, so the ING insurance arm would fit with that.
Li previously owned a Hong Kong-based life assurance company, Pacific Century Life, which he sold to Belgo-Dutch group Fortis. He also bought Pinebridge, a US-based asset management business, from AIG following the insurance company’s collapse during the global financial crisis.
Li, who is being advised by HSBC, spent several weeks trying to find a consortium partners who would be interested in the Japanese or Korean parts of ING’s Asia business, according to people familiar with his dealings.
However, the Dutch group and its advisers in the sale, Goldman Sachs and JPMorgan, did not allow consortium bids in the first round of bidding, which closed on May 18, because it would prefer to sell the businesses as a single unit.
Large North American groups MetLife and Manulife are thought to have lodged offers for all the Asian businesses, while Prudential Financial of the US, which had been expected to do so, dropped out days before the deadline without bidding, according to people familiar with the situation.
However, most other interested parties, including AIA, the pan-Asian insurer, are expected to avoid the Japanese unit, which has a good life assurance group but an opaque and potentially loss-ridden variable annuity division that writes long-term income guarantees to policy holders.
The Korean arm has generated some strong interest from domestic rivals, but the south-east Asian business, which is dominated by a Malaysian unit, is expected to attract the most interest and potentially the highest premium.
South-east Asia is seen as promising the highest growth rates as a burgeoning middle class looks to save for the future and protect its improving lifestyles.
As a whole, ING’s Asian insurance operations are expected to fetch between $6bn and $7bn. Li, HSBC, JPMorgan and Goldman Sachs all declined to comment.-By Paul J Davies