Saturday, May 29, 2010

AIG to explore other options for AIA?

With sources close to the Prudential bid for AIG's AIA revealing that the British insurer intends to lower the bid to US$30b, insiders have again said that AIG will be unlikely to accept such a low bid which is US$5billion lower than the original bid.

Prudential is facing pressure from certain shareholders who feel that the insurer is overpaying for AIG's Asian unit. This despite Prudential having successfully carried out its listing of shares in both Hong Kong and Singapore over the past week.

Sources close to the deal have reported that AIG still has other options open and will not want to sacrifice value. Previously, AIG had explored launching its own IPO for AIA when the target price for the acquisition of AIA was not met due to the financial crisis. That was put off after Prudential signalled its intention to acquire AIA in what will be one of the largest acquisitions this year.

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