LONDON bankers will miss the fees bonanza promised by Prudential’s swoop on AIA, but advisers in Asia are rubbing their hands at the prospect of a listing for AIG’s Far Eastern arm.
Prudential was preparing to shower £850m on a raft of investment banks led by Credit Suisse, HSBC and JPMorgan, and lawyers led by Slaughter & May, to strong-arm the City into backing its $35.5bn (£25bn) takeover of AIA.
After the collapse of the deal, expected to be confirmed this morning, the advisers will receive an estimated £350m for their services to date. Prudential will shell out a £153m break fee to AIG. It budgeted £500m for currency hedging, although market movements since then may make the resolution of that exposure less painful.
The insurer’s advisers came under fire alongside management yesterday for the gaffe-laden process that culminated in the deal’s implosion. Ian Nelson at Wyvern Partners said: “At least 50 per cent of the blame would go to the investment banks.”
Shareholders mocked the company’s reliance on a lengthy cast of advisers. Referring to the afternoon’s board meeting, one investor joked: “It was probably held in the O2 Centre, there are so bloody many of them.”
The refusal of the US Treasury and New York Federal Reserve, who own 83 per cent of AIG, to accept a lower price for AIA sparked suggestions an initial public offering (IPO) for the asset could be back on the cards.
AIA had been due for a $35bn flotation on the Hong Kong market before Prudential’s trade offer halted the process in February. Investment bankers in the region are already discussing a flotation in the third quarter after AIA’s first half results.