P&O receives nod to talk to Prudential.
August 13, 2010. By The Edge Market Malaysia.
KUALA LUMPUR, Aug 12 Malaysia’s central bank has given the nod for Prudential Holdings Ltd to begin talks to buy a stake in insurer Pacific & Orient (PACO.KL), a source with direct knowledge of the deal said on Thursday.
“Pacific & Orient received the approval by fax (Wednesday) yesterday morning, but there have been no discussions about a price yet,” the source said, asking not to be identified as the approval had not been made public.
Pacific & Orient shares were up 17 percent to 1.24 ringgit by 0847 GMT.
Pacific & Orient declined to comment while Prudential’s Malaysian officials were not immediately available.
Pacific & Orient had said this month it asked the central bank for approval to begin preliminary talks for the potential divestment of an equity interest in Pacific & Orient Insurance to Prudential [ID:nSGE6710H3]
The news follows Malaysia’s Hong Leong Financial Group (HLCB.KL) announcement n June it would merge its non-life insurance business with Japan’s Mitsui Sumitomo Insurance Co and sell a stake in its life business in deals worth about $480 million. [ID:nSGE65H02R]
Analysts have said Prudential may be changing its approach to penetrating the Asian market after its failed bid for AIG’s (AIG.N) Asian unit.
Prudential now holds a composite license in Malaysia that covers both the life and general insurance businesses.
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