FINANCIAL services group

Prudential has pulled out of its proposed #30m acquisition of Taiwan's Hung Fu Life after that company's principal shareholder attempted to change arrangements settled upon in the Agreement in Principle document signed on June 30, writes Kristy Dorsey.

The shareholder, whose name was not immediately available, was said to have demanded more cash and a larger minority shareholding than was originally agreed.

In addition to his slice of the #30m purchase price, that investor was also slated to retain an 8% equity interest in the business.

The Taiwan acquisition was regarded as a missing piece in the puzzle for Prudential's Asian operations.

The UK insurer has no activities in Taiwan but does operate subsidiaries or joint ventures in Hong Kong, Singapore, Malaysia, the Philippines, Thailand, Indonesia and India.

It is also on the verge of being granted a licence for business in China.

Mark Tucker, chief executive of Prudential Asia, said the company was ''disappointed'' by its failure to pull off the Hung Fu Life deal.

However, he added that any transaction had to deliver value for the company's shareholders.

''In our view the further, materially different demands placed on the terms of the deal, following our Agreement in Principle, run contrary to the interests of our shareholders,'' Tucker said.

''We are committed to the region and will continue to seek opportunities for expansion in Taiwan, where we see significant potential for growth.''

The Taiwanese government, which brokered a large part of the deal, is believed to be deeply embarrassed that it has now fallen through.

This could prove beneficial to Prudential, which is now thought to be considering setting up a new, wholly-owned operation in the island country.