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

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: