Prudential bid for AIA turns sour

LONDON - Prudential Plc Chief Executive Officer Tidjane Thiam was handed the chance to make a $35.5 billion bid for insurer AIA Group Ltd after his firm's share price almost tripled. The biggest decline in equity markets since the financial crisis may derail his plans.

Falling investor confidence sparked by Europe's sovereign debt crisis hampered corporate fundraisings in the past two months as Thiam, 47, asks investors for $21 billion, the biggest rights offer for an acquisition on record. Thiam was in New York on Thursday to make his case in person to American International Group Inc executives that the price for AIA should be cut, said a person with knowledge of the situation. The company confirmed in a statement that talks with AIG are continuing.

"It's probably the least ideal market to raise capital," said James Buckley, a London-based fund manager at Baring Asset Management Ltd, who helps oversee $44 billion, including Prudential stock. "The market is not completely closed for small rights offers, but for major deals like Prudential, it's inevitably tough."