Franklin Drops Bid for AIG Unit: Reports

Franklin Templeton Investments, the lead bidder for American International Group's (AIG Quote) asset-management unit, has dropped out, reports say.

The unit of Franklin Resources(BEN Quote), and its lead adviser in the buyout effort, Charles E. "Chuck" Johnson, a former executive of the mutual-fund company, dropped out over the weekend from two-month exclusive talks to buy AIG Investments. Irreconcilable strategic differences within the bidding group were said to be the reason, the Wall Street Journal reports, citing people familiar with the matter.

Franklin Templeton's bidding partners might seek a deal without the mutual-fund company, potentially with a new partner, the Journal reports.

Reuters, citing a source, also reports that talks continue with others in the consortium, which includes private-equity firm Crestview Partners.

"This deal remains on track and we're quite satisfied with the progress," an AIG spokesman told the Journal.

AIG back in March received interest from a range of bidders for AIG Investments. Since then, the potential price for the unit, which manages about $85 billion in investments for clients, has fluctuated from $800 million to as low as $300 million, the newspaper notes.

AIG, which has received about $180 billion from the U.S. government, is trying to sell assets to pay back the government loans.