It looks as though GIC and Temasek are not the only shareholders that got bad advice from their investment banks.
The AIA float soared 17% on its HK debut. This made it worth US$35.8bn, even more than the US$35.3bn that Pru had offered for it, but which upset Pru’s shareholders who tot it too much. They killed the deal.
But the IPO put a value of only US$33.3bn on AIA. As the US government owns most of AIG, the parent of AIA, one can argue that US taxpayers juz lost US$2.5bn.
Pricing IPOs is difficult but getting it wrong by 17% is way off. A 5% premium would be fair to investors and the seller.