Pru and AIG talk over sale of AIA
By Robert Barr |
May 29, 2010, Saturday
|
Print Edition
Print Edition
PRUDENTIAL Plc yesterday said it is talking with United States insurer AIG about the terms for the proposed sale of AIG's Asian unit AIA, a deal that faces resistance from Prudential shareholders.
Some shareholders are organizing opposition to the US$35.5 billion price agreed for AIA, and need to line up support from holders of 75 percent of shares by June 7.
"We confirm that discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing," Prudential told the London Stock Exchange.
"These discussions may or may not lead to a change in the terms of the combination of AIA Group Ltd and Prudential."
A number of analysts believe Prudential agreed too high a price for AIA.
Opponents of the deal have formed a Prudential Action Group, which is seeking to muster support for a vote of no confidence in Pru's chief executive, Tidjane Thiam. The group claims that at least 15 percent of shareholders intend to vote against the deal.
Prudential has announced a rights issue -- 11 new shares at 104 pence (US$1.51) each for every two existing shares -- to raise US$20.9 billion to help finance the deal. The firm also plans US$5.4 billion in hybrid debt financing.
American International Group Inc, which received over US$180 billion in aid from the US government during the financial crisis, hoped to raise US$51 billion from the Prudential deal and the sale of its American Life Insurance Co division to MetLife Inc.
"The key question remains how much the price needs to be reduced by to convince the skeptics to vote yes," said Eamonn Flanagan, analyst at Shore Capital.
Some shareholders are organizing opposition to the US$35.5 billion price agreed for AIA, and need to line up support from holders of 75 percent of shares by June 7.
"We confirm that discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing," Prudential told the London Stock Exchange.
"These discussions may or may not lead to a change in the terms of the combination of AIA Group Ltd and Prudential."
A number of analysts believe Prudential agreed too high a price for AIA.
Opponents of the deal have formed a Prudential Action Group, which is seeking to muster support for a vote of no confidence in Pru's chief executive, Tidjane Thiam. The group claims that at least 15 percent of shareholders intend to vote against the deal.
Prudential has announced a rights issue -- 11 new shares at 104 pence (US$1.51) each for every two existing shares -- to raise US$20.9 billion to help finance the deal. The firm also plans US$5.4 billion in hybrid debt financing.
American International Group Inc, which received over US$180 billion in aid from the US government during the financial crisis, hoped to raise US$51 billion from the Prudential deal and the sale of its American Life Insurance Co division to MetLife Inc.
"The key question remains how much the price needs to be reduced by to convince the skeptics to vote yes," said Eamonn Flanagan, analyst at Shore Capital.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
