atans1

Another IPO, another seller gets the finger

In Uncategorized on 01/11/2010 at 6:45 am

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.

Related posting

http://atans1.wordpress.com/2010/10/22/our-swfs-juz-lost-spore-s685million/

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