UPDATE 1-Pru withdraws from 3-month, $30.4 bln AIA bid

* Will not proceed w rights offer

* Failed transaction costs $659 million

(Adds details, background)

HONG KONG, June 2 (BestGrowthStock) – Prudential Plc (PRU.L: ) said on
Wednesday it is withdrawing from its effort to buy AIG’s (AIG.N: )
Asian life insurer, an expected move by the U.K. group after AIG
turned down a $30.4 billion offer for the company.

As a result, Prudential (2378.HK: ) said it will not proceed
with a $21 billion rights offering in London and Hong Kong
designed to raise money to finance the deal.

The U.K. insurer originally offered $35.5 billion for AIA,
then lowered it to $30.4 billion amid resistance from
shareholders that the company was overspending.

Pru (PRU.L: ) estimated the cost of the failed AIA transaction
so far at about 450 million pounds ($659 million), which
includes a break-up fee of 152.6 million pounds.

“We listened carefully to shareholders over the price and
initiated a renegotiation of the terms with AIG. Unfortunately,
it has not been possible to reach agreement,” Pru Chairman
Harvey McGrath said in a statement. “We are therefore
withdrawing from the transaction.”

Pru did not say that the AIG agreement has been formally
terminated but said in the statement that it was “expected.”

Stock Report

(Reporting by Michael Flaherty; Editing by Ken Wills)
($1=.6829 Pound)

UPDATE 1-Pru withdraws from 3-month, $30.4 bln AIA bid