- HONG KONG: The chairman of Prudential PLC said Tuesday he's confident the British insurer can secure shareholder approval for its planned $35.5 billion takeover of Asia-based AIA Group from bailed-out US insurer AIG.
Harvey McGrath spoke to reporters in Hong Kong, where Prudential shares debuted on the stock exchange along with a listing in Singapore. The two new listings aim to draw new investors for a $20.9 billion share issue that will help fund the AIA deal. Prudential also plans $5.4 billion in hybrid debt financing.
"I think the vast majority are very comfortable with the transaction," McGrath said.
In Hong Kong, Prudential shares dropped from their opening price of HK$59.70 to HK$57.20 amid losses across the region driven by worries about the euro and European debt problems. In Singapore, they fell from 7.72 Singapore dollars to SG$7.41.
At midday in Hong Kong, Prudential shares were slightly down from their opening price of HK$59.70 at HK$58.90. In Singapore, they were also down from the opening price of 7.72 Singapore dollars at SG$7.54.
Some investors and analysts think the $35.5 billion price tag for the takeover is too high, with opponents forming a Prudential Action Group that is trying to mount a vote of no confidence in Prudential Chief Executive Tidjane Thiam.
The group argues that AIA operations will consume cash generated by Prudential's British operations, while the proposed Asian acquisitions won't produce significant cash flows.
The Financial Times reported on its Web site that AIA chief executive Mark Wilson plans to quit if Prudential's takeover succeeds. He believes the combination of Prudential and AIA's businesses in Asia is unworkable, the report said quoting unnamed people close to Wilson.
McGrath said he wouldn't comment on speculation. "We are very excited by all of the very talented people we have gotten to know at AIA," he said.
Prudential needs approval from holders of 75 percent of its shares in a meeting on June 7.
The listings in Hong Kong and Singapore were launched by introduction — meaning Prudential is selling and trading existing shares in the two cities instead of offering new shares.

