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WHAT ARE THE IMPLICATIONS OF PRUDENTIAL’S TAKEOVER OF AIA?

MARCUS BARNARD | ORIEL SECURITIES
“The issue for the market is the scale of the equity issue that’s got to be done and the dilution that will come about as a result. They are issuing a lot of shares at a discount. Once the shares are away the thing could start to re-rate, but it’s not going to go anywhere for a few months.”

BARRIE CORNES | PANMURE GORDON
“While in the longer term we can see the advantages of this audacious and opportunistic acquisition, on a 12-month view we think that the shares will underperform and consequently lower our recommendation from “buy” to “hold” and lower our target price to 656p per share from 732p.”

DAVID PROWSE | FITCH RATINGS
“Prudential’s plan to acquire the Asian subsidiary of AIG would generate increased presence and cost savings for Prudential in Asia. However, we caution that the considerable risks involved in such a large transaction could put negative pressure on the ratings.”

MANOJ LADWA | ETX CAPITAL
“Prudential’s decision to bid for AIG’s Asian life insurance unit could prove a real coup if successful. The business is well established with over 20m customers and would further cement Prudential’s presence in the Asian markets.”