Rich Girlfriends and AIA Asia IPO

AIA, the Asian life insurance arm of AIG, raised $17.9 billion by pricing its IPO at the top of its range. The pricing of the IPO, likely the world's third biggest, comes as new listings proliferate in Asia. The AIA IPO is expected to generate up to $355 million in fees for banks involved in the sale.

That's not the big news, not even Kuwait's $1bn investment in the IPO. There were some juicier news about some of the other IPO bidders.

The Standard / Mandy Lo

Thursday, October 28, 2010

Two girlfriends of tycoon Joseph Lau Luen-hung each plonked down a whopping HK$5.6 billion to grab a massive share of insurer AIA Group's retail tranche.

The big-ticket subscriptions by the girlfriends of Chinese Estates (0127) chairman Lau account for more than 50 percent of AIA's retail tranche, sources told The Standard.

And their personal bids to grab such a huge portion of the public offering could well be a world record. The women - Yvonne Lui Lai-Kwan and Chan Ho-wan - have emerged as the biggest potential investors, trouncing large fund houses.

The subscriptions, made separately as their "personal investments," add up to a staggering HK$11.2 billion.

Rumors are rife that the subscriptions were applied for by Lau, but his spokesperson denied the reports and declined to comment further.

Lui and Chan were the biggest retail subscribers for AIA, each accounting for almost 50 percent of the retail portion.

The two women will be allotted at least HK$509.6 million worth of shares each - 9.1 percent of their total subscription, the source said.

They could each post a paper gain of HK$50.96 million if AIA shares rise 10 percent on their trading debut tomorrow, as they did earlier this week in the gray market for institutional investors.

As lovers of Lau, who frequently invests in listing candidates, it is no surprise that Lui and Chan are testing their luck with AIA.

But the huge amount involved has drawn intense market attention. There is speculatio

n that the subscriptions were Lau's latest gift to his girlfriends, or it could be an investment for his children's education.

Lui gave birth to a boy in August, after having a daughter in 2003, while Chan gave birth to a girl in 2008.

Lau has invested in numerous large IPOs including Agricultural Bank of China (1288), Sinopharm Group (1099) and Evergrande Real Estate Property (3333).

AIA, the Asian arm of American Insurance Group, priced its IPO at the top of its range at HK$19.68.

It seeks to raise funds to repay bailout debts owed by parent company AIG to the US government. AIA starts trading tomorrow.

AIA's total fund-raising size, including institutional and retail tranches, was boosted by 20 percent to HK$138 billion from HK$115.27 billion after the warm market response.

The insurer's IPO is set to become the third largest in the world.