FORTIS TO BUY MAJORITY STAKE IN PACIFIC CENTURY INSURANCE

Dutch-Belgian bancassurer Fortis is to buy a 50.48% stake in Hong Kong-listed Pacific Century Insurance (PCI) at a price of HK$8.18 a share, for HK$3.5bn in cash. It is purchasing the operation from Pacific Century Regional Developments (PCRD) and six other sellers, including Francis Yuen, PCI executive chairman. The price represents a premium of 58.2% to PCI’s share price when it was suspended on Monday. Upon completion of the deal, Fortis will make an unconditional mandatory general offer at the price being paid to PCRD. Fortis Insurance CEO Peer van Harten said that “this acquisition firs perfectly with our strategy to develop selectively in Asia”. He said that Fortis would “leverage its product and distribution skills to further grow the business”. Morgan Stanley is advising Fortis on the sale, while JP Morgan Chase is advising PCI. Meanwhile, PCI has reported net profit of HK$322.4m for 2006, on turnover up 9.1% to HK$1.99bn.