Friday, May 28, 2010

Prudential trying to lower AIA acquisition cost

A source familiar with the situation has revealed that Britain's Prudential is trying to lower the cost of US$35.5 billion for the acquisition of AIA. This price tag was agreed in March when Prudential signed an agreement to buy AIA from troubled AIG.

However, concerns have been raised over the ability of Prudential to convince shareholders who feel that it is overpaying for the deal. It has around a week to persuade shareholders to approve the deal and sign up for the US$21 billion rights issue.

The US Financial Times reported that Prudential was looking to offer as low as US$30billion for the acquisition. Another person familiar with the deal has revealed that there is "less than a 50/50 chance" that the deal will be done.

Meanwhile, AIA and Prudential have both refused to comment on the matter.

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