AIA deal to be opposed by some Prudential investors

May 31st, 2010 by James

AIA deal to be opposed by some Prudential investors
The Times
reported in its Thursday edition that some shareholders having a stake of approximately 15 percent of British insurer Prudential Plc’s shares are planning to oppose the company’s $35.5 billion takeover of AIG’s Asian arm.

The paper disclosed that it is believed that some of the biggest institutional owners of Prudential will be among those opposing the takeover and writing a letter to Prudential’s chairman Harvey McGrath within the next 48 hours.

From in.news.yahoo.com:

Shareholders have voiced concerns over the high cost of the takeover of American International Assurance, which will be financed through a record $21 billion rights issue.

Robin Geffen, the co-founder of Neptune Investment Management, which owns about 50 million pounds in Pru shares, is separately trying to marshal opposition to the AIA plan. He said yesterday that institutional shareholders accounting for more than 15 per cent had privately indicated to him that they were preparing to vote “no”, the Times said.

Geffen said he was canvassing investors to vote against the bid, according to the Times.

“The most important thing is to marshal the votes. That’s what I’m focused on,” he told the paper.

Shareholders are due to vote on June 7. Prudential needs 75 percent of voting stock to be cast in favour for the deal to go through.

It is believed that many investors will be urging McGrath for renegotiating the price.

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