“It takes two to tango,” as the saying goes, and Prudential (U.K.) apparently has no desire to dance with its larger rival Aviva Plc. It hastily rejected a £17 billion ($30 billion) offer a week ago (See IJ Website March 20), and has shown no inclination to change its mind since.
As a result Aviva announced that it will abandon its bid to acquire all of the Pru’s shares, and indicated that it doesn’t intend to pursue the matter further. Aviva had been reportedly sounding out some of the Pru’s larger shareholders after the company’s Board rejected its offer. Apparently their response was not encouraging.
The company’s official announcement said that although it “believes that the merger, on these terms, would have created significant value for both sets of shareholders. Aviva made clear that its proposal was dependent on the co-operation of Prudential. As this co-operation has not been forthcoming, Aviva has decided to withdraw its proposal.”
It did reserve the option – in accordance with “Rule 2.8 of the City Code on Takeovers and Mergers” – to “make or participate in an offer within the next six months in the event that the Board of Prudential agrees to recommend such an offer or a third party announces a firm intention to make an offer for Prudential.”
According to published reports, however, Aviva’s CEO Richard Harvey, sees little chance of the acquisition proposal being revived.
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