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Fortis Aims to Buy Pacific Century Insurance

Fortis Group plans to offer to buy Hong Kong tycoon Richard Li's flagship insurance firm, Pacific Century Insurance Holdings, a source close to the deal said on Thursday. The source gave no further details.

The Hong Kong Economic Times cited market sources as saying Fortis planned to offer HK$8.196 per share for all the issued share capital of Pacific Century Insurance, for HK$6.7 billion (US$858 million). The offer price would be a 42% premium over the shares' last trading price.

Richard Li's Singapore-listed Pacific Century Regional Developments, which holds 47.17% of the Hong Kong insurance firm, would receive HK$3.2 billion if it were to agree to unload all of its stake in the insurance firm, the newspaper said.

Morgan Stanley is the financial adviser for Fortis, and JP Morgan is the adviser for Pacific Century Insurance.

A source familiar with the situation had said earlier this week that Richard Li wanted to sell his controlling stake in Pacific Century Insurance and that foreign companies were bidding for the firm.

Pacific Century Insurance shares, which have risen 91% over the past year giving the company a market value of about US$604 million, were suspended on Monday after surging 11.8% to HK$5.78.