Pru in talks to cut AIA offer

PRUDENTIAL has entered talks to cut its $35.5 billion (£23bn) offer for AIG's Asian life insurance arm in a last-ditch bid to salvage a deal criticised by shareholders as too expensive.

The UK's biggest insurer is understood to want to cut the price to about $30bn, a reduction of 15 per cent. But AIG feels $30bn for AIA is too low and is not in a rush to do a deal, a source said.

Prudential faces a shareholder vote on the deal next week, with the future of chief executive Tidjane Thiam hanging on the bid.

"Discussions regarding the current status of the transaction have taken place and are continuing," a spokesman for Prudential said.

"These discussions may or may not lead to a change in the terms of the combination."