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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Manulife Financial Corporation    MFC   CA56501R1064

MANULIFE FINANCIAL CORPORATION

(MFC)
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AIA, Manulife crunch numbers as final ING bids loom

07/15/2012 | 05:32pm EST

HONG KONG (Reuters) - A wide range of suitors, from the son of Asia's richest man and a former rugby player in New Zealand to more established players including AIA Group (>> AIA Group Ltd) and Manulife Financial Corp (>> Manulife Financial), are expected to submit binding bids on Monday for ING Groep's (>> ING GROEP) Asia insurance business in a deal that could top $7 billion.

HONG KONG (Reuters) - A wide range of suitors, from the son of Asia's richest man and a former rugby player in New Zealand to more established players including AIA Group (>> AIA Group Ltd) and Manulife Financial Corp (>> Manulife Financial), are expected to submit binding bids on Monday for ING Groep's (>> ING GROEP) Asia insurance business in a deal that could top $7 billion.

ING is selling its Asian life insurance and its asset management units in the region as it needs to repay bail-out funds it received from the Dutch government during the 2008 financial crisis. Since the bail-out, ING has sold 15.2 billion euros ($18.6 billion) worth of assets around the world.

ING CEO Jan Hommen scrapped a joint IPO of ING's Europe and Asia units in favor of an Asia sale about six months ago. Since then, the worsening euro zone crisis has put some potential buyers off big M&A bets. Metlife (>> Metlife Inc) and Prudential Financial Inc (>> Prudential Financial Inc), considered strong contenders for ING's insurance business, have dropped out of the process.

ING's Southeast Asian operations have generated the most interest, with Japan's Dai-ichi Life Co Ltd (>> Dai-ichi Life), South Korea's KB Financial Group (>> KB Financial Group Inc), Korea Life Insurance Co Ltd (>> KOREA LIFE INSURANCE) and two groups expected to submit second-round bids for parts of the business, sources familiar with the process said, declining to be identified because discussions were confidential.

One consortium is led by ex-AIA CEO and a former rugby player Mark Wilson, backed by private equity firm Blackstone Group LP (>> The Blackstone Group L.P.) and Swiss Re (>> Swiss Re Ltd), while the other is headed by Richard Li, son of billionaire Li Ka-shing, which is likely to be interested only in the Hong Kong, Malaysia and Thailand businesses.

Wilson was in charge of AIA when it planned an initial public offering in 2009, but was replaced the following year after a failed bid for AIA by British insurer Prudential Plc (>> Prudential plc).

There is some skepticism over either consortium having a chance of winning.

"It gets complicated when you bring a private equity fund into the picture," said Hong Kong-based Keefe, Bruyette & Woods insurance analyst Stanley Tsai. "They will need an exit strategy in the next two to three years, making the deal more difficult to execute from a regulatory standpoint."

ING's Southeast Asian operations alone may fetch about $2 billion and could be sold at nearly two times embedded value, one source said. South Korea and Japan account for about two-thirds of ING's Asian business, but Japan may prove to be a stumbling block in the auction due to the 18 billion euros ($21.9 billion) worth of high-guarantee variable annuity policies the local operation has on its books.

The companies mentioned in this report either declined to comment or were not available for immediate comment.

BREAK-UP?

Monday's binding bids could set the stage for a final round of negotiations, after which ING will decide whether to sell the life business en bloc or break it up and sell Japan, South Korea and Southeast Asia separately. ING has not set a reserve price, and Hommen said in May that Asian divestments would probably fetch less than 8 billion euros.

Nomura Holdings is helping ING to find a solution for its Japanese operations, while Goldman Sachs (>> Goldman Sachs Group, Inc.) and J.P. Morgan (>> JPMorgan Chase & Co.) are advising ING on the rest of the auction.

Manulife may bid for the entire Asian operation, while AIA is interested in South Korea and Southeast Asia, sources said. Though some sources said, the Canadian financial company could also skip Japan.

ING's Asia operations offer a platform for insurers keen to expand in a region enjoying rapid economic growth. Life insurance premiums in emerging Asia are forecast to grow 8.7 percent next year, nearly double the world average, according to Swiss Re estimates.

Binding bids for ING's asset management business are also due this week, with Nikko Asset Management, U.S.-based Principal Financial Group (>> Principal Financial Group Inc), Royal Bank of Canada (>> Royal Bank Of Canada), Singapore's United Overseas Bank (>> United Overseas Bank) and Manulife expected to participate. The asset management sale is expected to fetch about $600 million.

(Reporting by Denny Thomas and Clare Baldwin; Editing by Ian Geoghegan and Ryan Woo)

By Denny Thomas and Clare Baldwin


© Reuters 2012
Stocks mentioned in the article
ChangeLast1st jan.
AIA GROUP LIMITED 3.67% 104.4 End-of-day quote.9.89%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.03% 0.78534 Delayed Quote.0.64%
DAI-ICHI LIFE HOLDINGS, INC. -0.20% 1757 End-of-day quote.13.21%
FIRST FINANCIAL CORPORATION 0.45% 41.96 Delayed Quote.7.54%
HANWHA LIFE INSURANCE CO., LTD. -3.15% 3070 End-of-day quote.25.82%
ING GROEP N.V. -0.13% 7.846 Real-time Quote.2.81%
KB FINANCIAL GROUP INC. -2.90% 45200 End-of-day quote.4.15%
MANULIFE FINANCIAL CORPORATION -1.14% 24.26 Delayed Quote.7.46%
METLIFE, INC. -0.05% 51.57 Delayed Quote.9.84%
NIKKO CO., LTD. -1.11% 713 End-of-day quote.-0.70%
NOMURA HOLDINGS, INC. 0.05% 590.4 End-of-day quote.8.33%
PRUDENTIAL FINANCIAL, INC. 0.06% 83.93 Delayed Quote.7.48%
PRUDENTIAL PLC -0.10% 1430.5 Delayed Quote.6.31%
ROYAL BANK OF CANADA 0.16% 108.36 Delayed Quote.3.43%
SET -1.10% 1519.13 Real-time Quote.5.98%
SWISS RE LTD -0.42% 84.5 Delayed Quote.1.82%
THE GOLDMAN SACHS GROUP, INC. -1.33% 303.75 Delayed Quote.14.88%
UNITED OVERSEAS BANK LIMITED 0.38% 23.97 End-of-day quote.6.11%
US DOLLAR / CANADIAN DOLLAR (USD/CAD) 0.67% 1.27301 Delayed Quote.-0.25%
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Financials
Sales 2020 73 485 M 57 704 M 57 704 M
Net income 2020 5 256 M 4 128 M 4 128 M
Net cash 2020 27 509 M 21 601 M 21 601 M
P/E ratio 2020 8,99x
Yield 2020 4,27%
Capitalization 47 633 M 37 402 M 37 404 M
EV / Sales 2020 0,27x
EV / Sales 2021 0,28x
Nbr of Employees 35 000
Free-Float 100,0%
Chart MANULIFE FINANCIAL CORPORATION
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Manulife Financial Corporation Technical Analysis Chart | MFC | CA56501R1064 | MarketScreener
Technical analysis trends MANULIFE FINANCIAL CORPORATION
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 25,13 CAD
Last Close Price 24,55 CAD
Spread / Highest target 14,1%
Spread / Average Target 2,38%
Spread / Lowest Target -10,4%
EPS Revisions
Managers and Directors
NameTitle
Roy Gori President, Chief Executive Officer & Director
John M. Cassaday Chairman
Rahul M. Joshi Chief Operations Officer
Philip Witherington Chief Financial Officer
Shamus Edward Weiland Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
MANULIFE FINANCIAL CORPORATION7.46%37 677
AXA2.73%58 194
PRUDENTIAL PLC6.31%50 960
METLIFE, INC.9.84%46 410
PRUDENTIAL FINANCIAL, INC.7.48%33 178
AFLAC INCORPORATED5.40%32 924