Prudential AIA deal runs into shareholder opposition, crucial meet set for 7 June
28 May 2010
According to Prudential PLC, it is talking with US insurer AIG about the terms for the proposed sale of the beleaguered US insurance and financial services gaint's Asian unit, AIA, a deal which has run into strong shareholder resistance.
Some shareholders are opposed to the $35.5 billion price agreed for AIA and are organising to line up support from holders of 75 per cent of shares by 7 June.
"We confirm that discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing," Prudential said in an announcement to the London Stock Exchange.
"These discussions may or may not lead to a change in the terms of the combination of AIA Group Limited and Prudential."
Some analysts believe Prudential's price for AIA is on the higher side.
Opponents of the deal have formed a Prudential Action Group, which seeks to muster support for a vote of no confidence in Tidjane Thiam, Pru chief executive. They claim that at least 15 per cent of shareholders would vote against the deal.