Prudential's Asian shares mixed as AIA deal collapses
Prudential's newly listed shares in Hong Kong and Singapore were mixed at the close Wednesday after the British insurance giant abandoned a controversial takeover of AIG's Asian unit.
Investors boosted the insurer's Hong Kong share price by 1.89 percent to 64.70 Hong Kong dollars (8.30 US dollars), while the stock fell 13 cents, or 1.56 percent, to 8.19 US dollars in Singapore.
Wooing Asian investors, Prudential last week took out secondary listings in Hong Kong and Singapore ahead of a rights issue worth 21 billion US dollars to help fund the deal for AIA, the Asian arm of American International Group.
One Hong Kong analyst said there could well be relief that the AIA deal had fallen through after Prudential's institutional investors rebelled at the price tag of 35.5 billion US dollars.
"AIA is three times bigger than Prudential -- it's too big for Prudential to swallow," Fulbright Securities general manager Francis Lun told AFP.
The monster takeover fell through after AIG refused Prudential's request to cut the price to nearer 30 billion dollars.
But David Cohen, director of Asian forecasting of Action Economics in Singapore, said there might still be life in the deal.
"Frequently in these sorts of transactions, there's a bit of back and forth," he said. "It's a poker game -- I think the story is not finished yet."
The takeover would have been the biggest ever in the insurance sector and would have transformed Prudential into the world's top non-Chinese insurer by market capitalisation, ahead of major competitors Allianz and AXA.
But Prudential chairman Harvey McGrath acknowledged that after AIG's refusal Tuesday to renegotiate the takeover terms, "we feel it is in the best interest of our shareholders not to pursue this opportunity".
AIG, which was saved from bankruptcy by the US government in September 2008, is now reportedly considering its own Asian listing for AIA.
© 2010 AFP