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Prudential chairman confident takeover will proceed

Harvey McGrath, chairman of Prudential PLC, has today expressed his confidence that the company will receive the 75% shareholder acceptance required to push ahead with the offer. There is much speculation in the marketplace that the proposed takeover of AIG's Asian operations, which would cost in the region of US$35.5 billion, is faltering.

While officially the company is still talking about a US$35.5 billion price tag for the operation there is intense speculation that Prudential is looking to reduce this by anything up to US$7 billion. Many experts believe that the US authorities, who effectively took control of AIG during the credit crunch, are pretty much over a barrel because of the significant amount of US taxpayer's money invested into the operation. The Obama camp is very keen to at least show that some progress is being made and taxpayer money will be returned at some point.

However, there is also speculation that the US authorities are secretly looking at spinning off the Asian operations in the event that a bid from Prudential does not materialise. The difficult state of worldwide stock markets is not helping the Prudential cause and today's significant falls are making a difficult situation even worse.

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