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Follow on Google News | JSM Financial: Prudential’s $35.5 billion AIA deal draws more warnings from analysts.Prudential’s takeover of AIG’s Asian insurance unit is facing increasing opposition.
By: JSM Financial A number of industry analysts have voiced doubt over Prudential’s revenue synergy targets with some saying that they are unrealistic. Recently Prudential shareholder RiskMetrics Group Inc has been campaigning for investors to vote against the deal, JSM Financial sources show, even though it has said that based on deal and trading multiples it believed that the firm was paying a reasonable price for AIA. Prudential is facing growing opposition from shareholders from whom it is asking $21 billion through a rights offer in order to part finance the takeover of the Asian life insurance unit, with many investors questioning the price that Prudential has agreed to pay for the massive growth step which will see it become a giant in the Asian sector. Also, JSM Financial has learned that one of the brokerage firms handling the deal, CLSA Asia Pacific recently released a report which showed that Prudential’s forecast revenue targets and agent productivity gains seemed unrealistic. "We see no revenue synergy should the two brands coexist and remain in competition. It is already a challenge to retain agents, let alone target a dramatic increase in sales," JSM Financial believes the report said. # # # JSM Financial is an independent broker focused on the realization of superior returns from seed stage and early-stage equity investment and active partnerships with exceptional entrepreneurs building market-leading technology companies. End
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