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Prudential scraps $35.5 bln bid for Asian insurer AIA

In Uncategorized on June 3, 2010 at 2:09 am

British insurance giant Prudential ditched its audacious deal to buy AIG’s Asian unit AIA. AFP file

LONDON (AFP) – British insurance giant Prudential ditched its audacious deal to buy AIG’s Asian unit AIA on Wednesday, ending a bid to become the world’s top non-Chinese insurer, after AIG refused to cut the price.

The failed takeover, worth 35.5 billion dollars (29 billion euros), was masterminded by Prudential’s high-profile Chief Executive Tidjane Thiam, whose glittering career now looks tarnished, according to media.

“Prudential plc announces that it is in negotiations with American International Group, Inc. (AIG) for the termination of the agreement for the combination of Prudential with AIA,” the London-based firm said in a statement.

The deal collapsed one day after AIG rejected a request by Prudential to cut the price to 30 billion dollars, following a shareholder revolt over the high cost.

Prudential had unveiled the record takeover in March, declaring it a transformational deal which would make it the world’s top non-Chinese insurer by market capitalisation, ahead of competitors Allianz and AXA.

The mega-deal would have been the biggest-ever takeover in the global insurance sector.

In reaction to news of the failure, Prudential’s share price sank 2.61 percent to 560.5 pence in early morning trading here on Wednesday, while the FTSE 100 index on which the group is listed was down 1.16 percent.

However, the stock had soared by 6.3 percent on Tuesday as investors had welcomed AIG’s refusal to budge on the price.

“Unfortunately, it has not been possible to reach agreement so we feel it is in the best interest of our shareholders not to pursue this opportunity,” Prudential chairman Harvey McGrath said in the statement.

“We are therefore withdrawing from the transaction.”

The British firm said it would now pay AIG a break fee of more than 152 million pounds (224 million dollars, 183 million euros), plus legal fees of 81 million pounds.

Prudential boss Thiam, born in the Ivory Coast, but with French nationality, took a huge gamble by making the ambitious bid for AIA only six months into his job at the helm of the British group.

Thiam, who aimed to transform the 162-year-old British company into an international insurance powerhouse, added on Wednesday that the deal had required renegotiation because of turbulent financial markets.

“We entered into this potential transaction from a position of strength in Asia and we view the region as offering excellent growth opportunities for Prudential,” Thiam said.

“We agreed with shareholders that a renegotiation of the terms was necessary given market movements but it has not proved possible to reach agreement.”

He also stressed that Prudential would keep a strong focus on growing its business in Asia.

“Our existing business in Asia has delivered another record performance in the first quarter of this year and we will continue to focus on generating sustainable shareholder value across our portfolio,” added Thiam.

But the Financial Times said on Wednesday that some investors were calling for Thiam’s head after his failure to renegotiate the deal.

“It will be an early agenda item — who will be the new CEO,” one major unnamed investor told the paper.

The Daily Telegraph reported that AIG had turned its back on Prudential and was instead pursuing other options.

Quoting sources, the paper said AIG was exploring talks with sovereign wealth funds, including Singapore-controlled GIC and Temasek, and Qatar Holdings, which could become “cornerstone investors” in AIA ahead of reviving plans for an initial public offering in Hong Kong.

The Telegraph said the implosion of the deal had made Prudential a bid target itself.

Prudential’s newly listed shares in Hong Kong and Singapore fell on Wednesday.

Investors marked down the insurer’s Hong Kong share price by 0.47 percent to 63.20 Hong Kong dollars (8.10 US dollars), while the stock was down 10 cents, or 1.20 percent, to 8.22 US dollars in Singapore.

Wooing investors, Prudential last week took out secondary listings in Hong Kong and Singapore ahead of a 21-billion-US-dollar rights issue to help fund the deal.

Despite the share price falls, one Hong Kong-based analyst suggested there might well be relief that the deal had fallen through.

“AIA is three times bigger than Prudential — it’s too big for Prudential to swallow,” Fulbright Securities general manager Francis Lun told AFP.

Thiam was appointed Prudential boss in March 2009, becoming the first black chief executive of a company listed on London’s benchmark FTSE 100 index.

Thiam, who began his role in October 2009, was formerly Prudential’s financial chief.

Source: SGGP

N.Korea scraps pact with S.Korea military

In Uncategorized on May 27, 2010 at 1:07 pm

Fabric scraps help women pick up the pieces

In Social life on October 11, 2009 at 4:17 am

Fabric scraps help women pick up the pieces

QĐND – Saturday, October 10, 2009, 22:22 (GMT+7)

A small Japanese group provides training to the wives of HIV-infected men.

Ti no longer earns a living as a xe om driver to bring prostitutes to work.

She and dozens of other HIV-infected men’s wives have been hired by a group of three Japanese women to sew wrapping cloth.

The mother of three in Go Vap District, Ho Chi Minh City, said she now has a safe job, earning around VND1 million (US$56) a month and still has time to do housework and take care of her children.

Every Friday, the seamstresses deliver their work to Japanese girls at a house on Hai Ba Trung Street, and take home fabric scraps to join them into colorful wrapping cloth.

Mai, a mother of four children whose husband died several years ago of HIV/AIDS, said she had been struggling to find jobs before she was introduced to the Furoshiki project, started last autumn and named after the Japanese word for “wrapping cloth.”

“Firms nearby won’t receive me as they know that I’m infected. And it’s inconvenient for me to travel far away. I’m not strong enough.”

Mai has earned around VND1 million a month from the project since March.

“That actually cannot cover all the expenditures but we feel more secure,” she said.

The project also provides income for old women like Tu, who has to wear two pairs of glasses to work.

Tu said people at Furoshiki are not sticklers for age and by working at home, she can lie down for a rest any time she feels tired.

The 59-year-old added she doesn’t have to wait a month to get paid, instread she receives the money upon delivery of the cloth.

Akiyo and Aki of Japan, who are running the project, find themselves busy every day collecting fabric scraps and old clothes.

“These are the materials for Furoshiki,” said Akiyo, who has been living in Vietnam for six years, has married a Vietnamese and speaks the language fluently, as do her colleagues Aki and Maiko.

Akiyo deals with finance issues while Aki is in charge of designing the cloth and instructing the needlewomen.

Maiko, initiator of the project, told Thanh Nien in an email from Japan that the idea occurred to her when she visited women and child victims of HIV/AIDS in makeshift rooms in HCMC.

She said she didn’t have money to give them or open a company to take them out of street life, so she started to collect cloth leftovers from garment companies and residents for the project.

The project aims to provide the infected women a way to earn a living just by staying in their rented rooms, Maiko said.

Yet the three Japanese women are rather strict about the cloth quality and they won’t accept cloth that contains sewing errors.

“The seamstresses only need thread and needles and their job is to join fabric scraps into bigger cloth to produce pieces of art that can be used for different purposes other than wrapping.”

Maiko said that the project managers also wished to make people use more cloth bags and less plastic bags.

Although Furoshiki is a Japanese traditional bag, Akiyo said the bags would not be strange in Vietnam, where people in the old times used a similar cloth bag called tay nai (knapsack).

“That is the Furoshiki of Vietnam.”

The made-in-Vietnam Furoshiki has been consumed mostly in Japan as Maiko knocks on many doors in Japan including stores, cafés, exhibitions, and yoga centers to promote the product.

Some of the bags have been sold to visitors from France.

Source: VietNamNet/TN

Source: QDND


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