Report American General To Accept AIG Offer

Although there’s been no official word as yet, The New York Times, The Wall Street Journal and the Financial Times all reported on their respective websites that Houston-based life insurer American General would announce that it had formally rejected Britain’s Prudential plc’s merger bid in favor of a better offer from American International Group..

On April 3rd AIG’s CEO Maurice “Hank” Greenberg made a rival proposal to Am Gen’s president Robert Devlin when Pru’s $26.5 billion all share offer dropped in value as its shares declined. AIG’s proposed share swap remains worth around $23 billion, as its share price has remained steady.

Talks between the two, and assumedly with Pru, have been going on for the last month, and it now appears that they are very close to announcing a formal deal. If they do, Am Gen will owe Pru a $600 million breakup fee; Greenberg has indicated, however, that the penalty payment was taken into account when he made his offer.