Reports from the Prudential PLC confirmed that it was discussing with U. S. insurer AIG the terms for the proposed sale of AIG's Asian unit, AIA.

The deal that proposes the takeover at $230.6 million is facing harsh criticism from the Prudential shareholders. Reports suggest that in case the AIA deal falls apart, Prudential would owe AIG $230.6 million as the termination fee.

It is believed that some shareholders are opposing the $35.5 billion price that has been agreed for AIA. However, support from holders of 75% of shares is mandatory by June 7.

In an announcement to the London Stock Exchange, Prudential said, "We confirm that discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing. These discussions may or may not lead to a change in the terms of the combination of AIA Group Limited and Prudential".

The share prices of Prudential increased by 1% at 553 pence.

However, a large number of eminent financial analysts feel that Prudential has agreed on too high a price for the buyout of AIA.

Commenting on the deal, Eamonn Flanagan, Analyst at Shore Capital said that the key question that needs to be addressed is by how much the price needs to be reduced, in order to persuade the skeptics to vote a yes.