PRUDENTIAL investors are eagerly awaiting details of a rescue plan for the insurer’s $35.5bn (£24.5bn) takeover of AIA after their protests threatened to derail the deal.
Prudential boss Tidjane Thiam and Robert Benmosche, head of AIA’s US parent company AIG, spent the bank holiday weekend battling to save the tie-up by persuading AIG’s government owners to knock up to $5bn from the Asian unit’s asking price.
Thiam knows Prudential shareholders will block the acquisition at a vote on 7 June unless he can shrink the headline number. Benmosche is keen to sell the operation to?Prudential, even at a lower price, because an initial public offering (IPO) would be difficult to achieve at current levels of market turbulence.
Opposition to the ambitious purchase has reached fever pitch in recent days. Shareholders such as F&C Asset Management have publicly said they will vote down the merger.
Advisers to Prudential and AIG are understood to be pressing the US Treasury and New York Federal Reserve to cut the shares portion of the payment. The cash part would remain intact, so Prudential investors would still be tapped for $21bn.