AIA turn down discounted acquisition offer from Prudential
Negotiations over Prudential's planned acquisition of AIA look set to continue.
Prudential will have to step up its offer for AIA if its planned
acquisition is to have any chance of success, it has been
The insurance giant has, over the past couple of weeks, been
working to negotiate a lower price for the Asian arm of the US
insurer AIG, with a price of $30 billion having been mooted.
This price was expected to sit well with Prudential's
shareholders, many of whom are opposed to the planned
However, AIG has stated that it will not consider any revisions
to the deal proposed towards the start of the year, which valued
the company at $35.5 billion.
A statement released by AIG read: "After careful consideration,
the company will adhere to the original terms of its previously
announced agreement with Prudential."
The development has split economic observers, with Panmure
Gordon analyst Barrie Cornes telling Channel 4 News that, unless
AIG changes its mind and acquiesces to a reduced price, the deal is
unlikely to go ahead as Prudential will fail to achieve the
shareholder support it needs.
On the back of the news, shares in Prudential increased in value
by four per cent.