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Franklin Leads Bidders for AIG Asset Unit

Joseph Woelfel

Franklin Templeton Investments has emerged as the leading bidder for American International Group's(AIG) asset-management business, reports say.

The AIG Investments unit, which manages about $85 billion in assets for clients including pension funds and insurance companies, is expected to go for about $500 million, well below the $800 million some suitors proposed paying just two months ago, the Wall Street Journal reports, citing people familiar with the matter.

A deal could be completed by the end of June, the newspaper reports.

Australia's Macquarie and India's Religare, which formed a joint venture to compete for the AIG division, will re-enter the bidding if AIG's negotiations fall through with Franklin Templeton and its partner, New York-based private-equity firm Crestview Partners, the Journal reports. At this point the talks with the Franklin Templeton group are exclusive. Franklin Templeton is owned by Franklin Resources(BEN).

Bloomberg first reported the status of Franklin Templeton and Crestview as leading bidders for the AIG unit.

The group, being advised by former Franklin Co-President Charles Johnson, plans to keep Win Neuger as head of the division, Bloomberg reports, citing people familiar with the matter. After a purchase, Franklin would have a minority stake in the AIG business.

AIG has been trying to sell many of its assets to help it repay the $182.5 billion in financial support it has received from the U.S. government since September.