No AIA takeover by Pru

The buyout of AIA by Prudential for $35.5bn in Asia suffered another crushing blow this week as one of the company’s largest shareholders, F&C Asset Management, stated that it would not support the move.

F&C stated that while it was overall supportive of the deal’s strategy, there were doubts over the high price tags and the problems that Prudential may face if they actually complete the takeover.

They also stated that they are not concerned about the capital position of the group, but they could not help but they feel the transaction has too many risks during execution to make it practical.  Due to the risks, piled onto the big price tag the transaction would incur, there is no margin for error making it a poor move by the company.

F&C holds a .7% stake in Prudential, which translates into £90.3m.

They also said that the company is aware that Prudential is attempting to renegotiate the price of the AIA takeover, but said it would have to vote in regards to what is currently in the works.

Another top ten investor has already been said to have voted ‘no’ to the deal causing Prudential to convene a special voting session set for June 7th but many of the shareholders will vote before this date so that their forms arrive in time to be counted.

In order to proceed with the takeover Prudential will need a 75% approval vote, and at this moment around 15% of shareholders have already said they oppose the takeover.