Life insurance giant Prudential pulls plans to buy AIG Asian : AIA
Life insurance giant Prudential pulls plans to buy AIG Asian : AIA
2010/06/02 by ukcitymedia.co.uk about : Company Reports, Endowments - 0 Comments - 189 words
Prudential, who scrapped plans to buy AIG's Asian arm AIA last week, are under pressure from institutional shareholders to make changes on the board. The papers are hinting today that chairman Harvey McGrath and chief executive Tidjane Thiam could end up moving on after the proposal fell apart.
Chairman Harvey McGrath indicated that the board withdraw its interest after failing to negotiate a reduction to the $35.5bn price tag for AIA. Correspondingly, the Pru's plans for a $21bn right issue will now also be scrapped.
AIG rejected the Pru's revised proposal last wednesday in which the offer price was cut from $35.5bn to $30.75bn. AIG chief executive Robert Benmosche agreed in principle to the revised terms, however the rest of the board voted 10-2 against. AIG will now revive its earlier intention for a partial listing of AIA on Hong Kong stock exchange.
Prudential could now faces penalties as well as costs associated with the deal. Break fees of £153m will will be applicable whilst the Pru can also expect to pick up the considerable tab for underwriting, advisory and other fees likely to be close to £300m.
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