Eastern promise

29 Oct 2010 By Peter Thal Larsen Follow @Peter_TL

Following a firstday pop, the Asian insurer is now worth as much as its UK rival’s failed bid in March. Pru’s management may feel vindicated, though a deal would have faced integration and regulatory risks. At least AIA’s success will help lift the value of Pru’s own Asian arm.

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Shares in AIA surged 17 percent on their first day of trading in Hong Kong, valuing the insurer at HK$278 billion ($35.8 billion).

The firstday surge lifted AIA's value above the price of $35.5 billion that Prudential of the UK offered for the business in March. Pru subsequently reduced its bid to $30.4 billion following regulatory setbacks and pressure from its shareholders but the board of American International Group, AIA's parent company, rejected the offer.

AIA shares closed at HK$23.05, compared to the IPO price of HK$19.68. At 1100 GMT, Prudential shares were unchanged in London at 630.5 pence.

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