Pru to launch charm offensive over AIG Asia

7th Mar 2010 11:15

Prudential will this week start a charm offensive to persuade its big investors to back the deal to buy AIG's Asian businesses.The life insurer's share price slumped last week on news of the $35.5bn deal and a $20bn rights issue to help pay for it.Some large investors reportedly have already balked at the prospect of stumping up the cash, but chief executive Tidjane Thiam will tell institutional shareholders this week that the combined business could be ten times its current size within ten years."We have doubled the size of Prudential's Asian business three times in the past 10 years," said Thiam. "If you take that as precedent you could anticipate, with a dramatic shift in scale from this transaction ? starting with low penetration generally, a rapidly growing middle class and a high propensity to save ? a business that will grow dramatically."Meanwhile, Pru chairman Harvey McGrath told the Sunday Telegraph he was not surprised by the market's reaction to the deal."We expected to see a price reaction given the nature of what was announced and the size," he said.He added Prudential was also committed to both its UK and Indian businesses. "We do not need to sell the UK business or any other business in order to do this transaction," McGrath said. "The UK remains a very important part of the group, we have seven million customers here in the UK. It is an important source of capital and cash and a key part of the group."