AIG Demands for Original Deal with Prudential
A lowered offer of $30.38 billion for Asian operations has been announced as unacceptable by the American International Group (AIG). It has already left a deal being on the verge of collapse with U. K. life insurer Prudential.
AIG claims to bond to the original terms of the contract, according to which Prudential had already settled to shell out around $35.5 billion for the business. On the other hand, after failing to bargain a recovered value, Prudential said that it was "considering its position".
Due to the chances of takeover getting minimal, the shares of the U. K. Group scaled up to 3.5%. A 7% drop in the stock has been witnessed, which was immediately prior to the deal was announced; whereas, after some time of the announcement, it scaled up to 18% from its low point.
"The markets clearly believe the deal that would have seen Prudential make its largest ever acquisition and that would be accompanied by a record-breaking rights issue is dead in the water," said Howard Wheeldon, senior strategist at BGC Partners.
He also added that Prudential CEO Tidjane Thiam has a chance of departure, if in case the deal collapses. Thiam has efficiently ventured his career on pushing through the colossal acquisition.
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