Prudential UK Bid for AIG Asia Unit Fails, Flaring Investor Anger
[Update 1: clarifies Prudential PLC] UK-based Prudential PLC shareholders are reported to be furious over the costs associated with a failed takeover bid for AIA Group, the Asia-based life insurance unit of American International Group (AIG). AIG, one of the largest global providers of property and casualty insurance, announced last week that attempts by Prudential to lower its initial bid for AIA were rejected. In an interview on UK financial news provider Cantos, Prudential chairman Harvey McGrath said the revised bid stood at around $30bn and that they had received an early indication that the AIG board would accept the bid. Last week, AIG announced it would not consider revision to the original bid and ended negotiations, leaving Prudential to eat costs associated with the attempted acquisition. "I do understand [shareholder] anger and I'm very sorry that we've had to incur the costs and yet not been able to complete the transaction," McGrath told Cantos. He added that calls for his resignation, as well as other executives, come from a minority of Prudential investors and that the failed bid will not result in a major shift in strategy at the firm. Since being bailed out by the Federal Reserve in 2008, AIG is actively seeking to offload its operations bit by bit in order to repay those loans. AIA operates in 15 Asian markets, serving more than 23m customers in the region with a network of 320,000 agents and 23,500 employees. Write to Jacob Gaffney.