DealZone

DealZone Daily

Prudential shares rise — modestly — after UK newspaper reports that its largest shareholder — Capital Group – is working on a plan to split the group up. The U.S. investor is not happy with Pru’s planned $35.5 billion acquisition of AIA, the Asian life insurer. It is working with Clive Cowdery’s acquisition vehicle Resolution, insurer Aviva and a third, unknown group, the reports say. An unlikely scenario? Perhaps, but it does show some serious discontent among shareholders.

HSBC has denied talk in the market that it may renew its bid for a $3.9 billion stake in Korea Exchange Bank. When asked whether the bank was bidding for LoneStar’s KEB, the bank’s Chief Executive Michael Geoghegan said: “No, we are not”. Right, that’s settled then.

Deutsche lends credibility to its ambitious targets with quarterly earnings that beat forecasts. The earnings benefit from strong results in debt trading — and the absence of markdowns in areas such as leveraged loans. More on investment banking later, when Goldman Sachs appears before the U.S. Senate.

For all other Reuters stories about deals & investment banking, click here. In other media (some links may require subscription rights):

Cemex, the world’s No. 3 cement maker, is considering selling off minority stakes in some of its operations worldwide, in a bid to cut its debt, the Financial Times says.

DealZone Daily

British insurer Prudential is to list in Hong Kong on May 11 and announced a secondary listing in Singapore to fund its $35.5 billion takeover of rival AIA, AIG’s Asian life insurance business.  Prudential said it would publish prospectuses for each of the listings on May 5.

U.S. air carriers United Airlines and Continental are considering a nil premium all stock merger to create the world’s largest airline valued at about $6.6 billion.  US Airways earlier dropped out of merger discussions with United. Many believed United had only entered talks with US Airways to draw out Continental, arguably a better match for it.

CenturyTel is to buy Qwest Communications in another stock deal, valuing the combination of the U.S.’s third and fourth largest landline telephone companies at $10.6 billion. The deal is designed to let the new business, CenturyLink, cut costs and compete more effectively, as consumers increasingly unplug their phone lines and go mobile.

DealZone Daily

United Airlines has restarted merger talks with Continental Airlines as it eyes the top spot as the world’s largest air carrier. The two laid much of the ground work for a deal in 2008 but decided to puruse an alliance instead. A deal could leave US Air jilted despite four months of negotiations with United but, in a further twist to the aerial saga, United has also raised the topic of a deeper three-way cooperation between the airlines.

Top Macarthur Coal shareholder CITIC Resources said it has not yet decided whether to support a A$16 a share offer from Peabody Energy valuing the Australian miner at $3.8 billion. The 22.4 percent stakeholder said it needs more information to make a final decision on the Peabody bid.

Prudential’s Asia CEO said the British insurer is under no pressure from its shareholders to cut the $35.5 billion purchase price for AIG’s Asian life insurance unit.

DealZone Daily

Sberbank, Russia’s biggest lender, is lining up a bid for the 21 percent stake in Turkey’s Garanti Bank that is being sold by General Electric, a source close to the deal tells Reuters. The stake in the most actively traded stock on the Istanbul bourse is worth $3.7 billion at current market prices. Read the story here.

And in news from other media on Tuesday:

Marsh & McLennan, the number two global insurance broker, has put its security consulting business Kroll up for sale for $1.3 billion, the Financial Times said.  Carlyle, Apax, BC Partners, General Electric and two trade bidders made first expressions of interest in late February, the report says.

Prudential shareholders have been given assurances they will share in the lucrative underwriting of the insurer’s record $21 billion rights issue to head of a brewing row between investors and the company, the Telegraph said, citing sources close to the company.