China's Ping An, CIC eye stakes in AIA - FT

SINGAPORE Oct 18 (Reuters) - Sovereign wealth fund China Investment Corp (CIC) [CIC.UL] and Ping An Insurance Co of China (2318.HK) are among big Chinese institutional investors eyeing significant stakes in AIA Group, the FT reported, citing people working on the deal.

AIA, the Asian life insurance unit of bailed out insurer American International Group (AIG.N), will be listed in Hong Kong through an initial public offering to raise up to $20.5 billion.

The IPO is scheduled to be priced on Thursday.

China Life (2628.HK), the world's biggest life insurer by assets, and Taikang, another Chinese life company, are also lining up for stakes in the IPO alongside other significant regional life insurers including the Asian arm of Britain's Prudential (PRU.L), the FT reported, citing one person involved in the deal.

CIC is interested in taking a stake of about $250 million, according to the report.

"Initially there was reluctance on the part of China Inc to be part of this for political reasons. They did not want to be seen as bailing out the U.S. and to be seen as rescuing AIG," said one banker, cited by the FT.

"Now they don't want to be left out."

Underwriters had tried to woo CIC, China Life and others into the deal as cornerstone investors, which have to commit to hold shares for at least six months in return for receiving a guaranteed allocation.

But because of the size of the deal and the fact that cornerstone investors would not get a discount on the price, CIC decided there was little advantage in coming in early, bankers said in the FT report.

The FT said that CIC could not be reached for a comment.

(Editing by Lincoln Feast)