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Source: ManLife, Prudential May Make Cash, Stock Offers to AIG Asian Unit

Source: Bloomber

Posted on 27 Feb 2009

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Manulife Financial Corp. and Prudential Plc may offer cash and shares for American International Group Inc.'s largest Asian insurance unit when bids are due today, three people familiar with the matter said.

The insurers may also consider joining with sovereign funds to buy American International Assurance Co., the people said, asking not to be identified before a buyer is chosen. The unit has an embedded value of about $20 billion, one of the people said. Embedded value estimates a company’s net worth excluding new business.

AIG is negotiating with the U.S. for a revised bailout as Chief Executive Officer Edward Liddy struggles to raise enough money from asset sales to repay the loan portion of the $150 billion government rescue. The pool of potential buyers is shrinking because of scarce credit and the global recession.