Prudential To Be Supported On Condition of 10% Shedding
The biggest insurer of Britain Prudential will be backed by a shareholder for its planned takeover of AIG’s Asian business AIA. The backing will be on condition that Prudential will shed more than 10% off the $35.5 billion price tag.
Chief Executive, Tidjane Thiam, announced this when he was in San Francisco on Friday regarding confrontation with Capital Group which is his biggest shareholder.
The Fund Manager owns 13% of Pru’s shares. It is predicted that it will vote in support of the deal if the price dips between $31 billion and $32 billion.
It has been hinted by senior sources that there are many firms that intend to a back Thiam provided the terms are “renegotiated”.
Further, investors are forcing Thiam to “secure a price cut from AIG to save the deal”, for conditional support.
If the insurer manages to get the support, it will become the biggest insurance company in the fastest-growing economies of Southeast Asia. It is said that if the decision fails, Thiam’s job will be at risk.
The opponents of the shareholder last week warned to wreck the transaction. One deal was led by Robin Geffen, a rebel investor; stated to have “shares amounting to more than 20% of the company lined up to oppose it”.
This week, Thiam is out discussing with the AIG board regarding lessening the price.
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