Prudential Plc, which aborted the largest acquisition in its 162-year history, doesn’t plan to revive its bid to buy the main Asian unit of American International Group Inc., it said in an e-mail today.
Prudential remains committed to the region through its existing “very successful business,” it said in the e-mail. It was responding to London’s Sunday Times newspaper, which reported today that Chief Executive Officer Tidjane Thiam was considering another attempt at buying AIA Group Ltd.
Prudential terminated the agreement to buy AIA for $35.5 billion on June 3 after AIG directors rejected its last-minute attempt to lower the price to $30.4 billion to appease investors. Thiam and Chairman Harvey McGrath are facing pressure from some shareholders to step down after the failed deal cost it about 450 million pounds ($650 million) in fees.
“Had he stuck to his guns and got the deal done, he would have been given time to make it work,” Ben Collett, head of equities at broker Louis Capital Markets (Hong Kong) Ltd., said of Thiam. “Trying to renegotiate was admitting the price was too high to the shareholders.”
Thiam believes he could put forward a new offer for AIA before year-end and could gather enough shareholder support to derail an attempt to take AIA public, the Sunday Times said today, citing unidentified people close to the company. No active discussions have been held, it added.
“We will not be resurrecting the AIA deal and any speculation is misguided and inaccurate,” Prudential said in the statement today.
AIG was selling AIA to help repay $182.3 billion received in a U.S. government bailout. AIG may return to an earlier plan to take AIA public through a stock offering, the Treasury Department said on May 26.
AIA had filed an application for a Hong Kong initial public offering before Prudential announced it was in talks to buy it in February.
AIG directors rejected Prudential’s revised offer after investment banks including Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley valued the AIA business at $32 billion to $36 billion, people with knowledge of the matter told Bloomberg earlier this month.
The aborted acquisition by Prudential would have created the largest life insurer in Hong Kong, Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam. Yet some investors balked at the price tag and a $21 billion rights issue, the largest in the U.K. corporate history, to finance the purchase.