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February 19, 2009

Four bidders vie for AIG's Philippine assets
US insurer American International Group has shortlisted four potential buyers for its Philippine life insurance business, sources familiar with the negotiations said on Wednesday.

The likely bidders for Philippine American Life and General Insurance Co (Philamlife) are the Bank of the Philippine Islands , Banco de Oro Unibank , Toronto-based Manulife Financial Corp and an unidentified foreign investor, the sources, who did not want to be identified because they were not authorized to talk to media, told Reuters.

A top official at Banco de Oro confirmed the bank was preparing to submit a bid on Monday for Philamlife. Philippines' second-largest bank by assets will partner Assicurazioni Generali SpA -- Italy's biggest insurer -- and Malaysian general insurer Jerneh Asia Berhad of the Kuok Group, the official, who did not want to be identified, told Reuters.

Bank of the Philippine Islands has teamed up with Britain's Prudential Plc , the sources said. Officials at Manulife Philippines and Prudential Corporation Asia in Hong Kong declined comment. Calls to a Bank of Philippine Islands spokeswoman were not answered.

The bidders have until February 23 to submit their bids, one of the sources said. The earliest the sale can be finalized is the first week of March, the second source said.

It is not known how much Philamlife will fetch for AIG. The group, with a book value of 49.5 billion pesos ($1.04 billion) at the end of 2007, sold its consumer finance and banking units to mid-sized local lender East West Bank of the Filinvest group last month for about 2 billion pesos.

The sale of Philamlife, the country's biggest insurance firm, is part of AIG's fund-raising to pay off a total $150 billion lifeline from the US government. But the sale would not include Philamlife's non-life insurance business, in line with AIG's plan to retain its foreign general insurance businesses.

Philamlife president Jose Cuisia said on Wednesday AIG's board, in consultation with the Federal Reserve Bank of New York, would decide the winning bidder. "AIG wants to raise the funds as early as possible," Cuisia told reporters.

"But they also will not do it at firesale prices. They will make sure that the price is what they consider as fair and reasonable so they are not going to rush," Cuisia said. Cuisia confirmed there was a shortlist but did not identify any of the bidders, saying he was barred from giving out details under a non-disclosure agreement.

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