M&A

2 November, 2009

REFILE-UPDATE 1-Chinatrust lawyers study AIG unit sale

(Corrects to remove extraneous "the" in first paragraph)

* Chinatrust says may consider legal action against AIG

* Chinatrust says bid for AIG's Nan Shan higher than Primus

By Rachel Lee

TAIPEI, Nov 2 (Reuters) - Chinatrust Financial (2891.TW), Taiwan's top credit card issuer, has hired lawyers to study the results of AIG's (AIG.N) sale of its Taiwan life insurance unit Nan Shan Life, a senior executive said on Monday.

Last month, Chinatrust lost its bid for Nan Shan Life to Primus Financial, which agreed to pay embattled U.S. insurer AIG $2.15 billion for the unit. [ID:nTP307656]

Chinatrust bid $2.4 billion for Nan Shan, a source with direct knowledge of the deal told Reuters in September.

Chinatrust did not rule out the possibility of taking legal action against the U.S. insurer, Chinatrust Chief Investment Officer Daniel Wu said at an investor conference in Taipei on Monday.

Wu said Chinatrust's bid was higher and its proposal to take care of Nan Shan employees was better. He declined to reveal further details about Chinatrust's bid, citing confidentiality agreements with AIG.

"Our consultants think there are some questions in parts of the sale," Wu told reporters.

No-one at AIG was immediately available to comment.

The Nan Shan sale marked the largest disposal since the U.S. government bailed out AIG, which saved the insurer from collapse last year.

Shares of Chinatrust ended down 1 percent on Monday, underperforming Taiwan's main index which slumped 0.07 percent.

(Reporting by Rachel Lee; Writing by Faith Hung; Editing by Erica Billingham)

Source: http://www.reuters.com