Prudential set to ask for revised terms for AIG acquisition
It is believed that UK insurer Prudential has approached AIG in relation to the ongoing acquisition of the company's Asian operations. This is an acquisition which has hit the buffers in the UK with regards to liquidity and capital adequacy requirements with the FSA stepping in to delay the purchase. However, in a move which would ultimately see AIG receive around USD2 billion less in cash than the agreed figure but still see the deal go through it is believed that AIG is sympathetic to the cause.
The USD2 billion in question relates to senior debt which the Prudential had planned to take on as part of the deal. If the new revised conditions are accepted we could see AIG subscribe a total of USD2 billion in exchange for a slice of the senior debt allocation (rumoured to be in the region of USD5 billion). It is believed that the US government, which has recently pumped billions of dollars into the operation, is keen to see a return for US taxpayers and is also keen to see the deal go through. A revision of the original terms would be a feather in the cap of the Prudential management which has come under significant pressure over the last few weeks.
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