JSM Financial: Prudential’s bid for AIA faces shareholder resistance.

April 27, 2010 - PRLog -- JSM Financial has learned of recent reports indicating that the giant British insurer Prudential could be facing a shareholder revolt over its intention to buy the Asian arm of American International Group. The deal has been masterminded by the firm’s chief executive and is expected to be partly finance by a massive $21 billion share sale.

According to newspaper reports Prudential’s biggest shareholder, Capital Research and Management, has voiced reservations about the deal and have indicated that they would rather see a breakup of Prudential.

JSM Financial understands that another top-10 investor has also said that the deal may struggle to get the necessary shareholder vote for the right issue.

"There is a very good chance they won't get the 75% needed, in which case the management would be in a very difficult position; effectively a vote of no-confidence in the strategy of the company," JSM Financial believes the shareholder was recently quoted as saying.

"Prudential needs to really get out and sell this deal on its merits once the prospectus comes out," commented one industry executive. "Fund managers need to see the prospectus. It is hard to make a compelling view until they have all the data."

Prudential’s bid for AIA was a massive boost for AIG who are attempting to pay back a $182.3 billion U.S. federal bailout package after its near collapse at the height of the global economic meltdown in September 2008.

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