Britain's biggest insurer Aviva ruled out a hostile bid for Prudential today saying it hoped investors would persuade its rival to reconsider the £17 billion (€24.5 billion) proposal it has spurned.
Shares in Prudential, Britain's second-biggest insurer, rallied as much as 12.8 per cent on early trading on speculation that Aviva would improve its all-share bid, or that a counter-bidder might emerge.
But Aviva chief executive Richard Harvey said the firm was not working on sweetening its existing proposal, which would create the world's fifth biggest insurer by market value.
"We're certainly not in the process of entering into revised offers," he said in a telephone interview.
"We're very clear this is the proposal that was on the table; it's been rejected by Pru's board and it's really for their shareholders and ours to indicate if they would prefer for the arrangement to go ahead," he added.
Aviva wants to create an insurance giant by adding its closest rival's fast-growing US and Asian businesses to its own strong European foothold, and said it was offering 82 Aviva shares for every 100 Prudential shares.
Prudential rejected the proposal on Saturday, saying it was not in investors' best interests.
Aviva said today it was only prepared to proceed with the proposal on a recommended basis.