Britain's Prudential in talks to buy AIA: sources

The logo of British life insurer Prudential is seen on their building, in London October 21, 2008. he first nine months of the year.

LONDON (Reuters) - Prudential (PRU.L), Britain's largest insurer, is in advanced talks to buy the Asian operations of bailed-out insurance giant AIG (AIG.N), sources familiar with the discussions told Reuters on Saturday.

Financing for the deal -- which could be worth more than $20 billion and would propel Prudential to the top spot among insurers in Asia -- could include a bumper share issue, the sources said.

Prudential declined to comment.

A year ago sources familiar with the matter said that Prudential had made a preliminary offer for AIA, but its modest price fell short of the seller's expectations.

At the time, AIG had wanted between $20 billion and $40 billion for AIA, depending on the size of the stake to be sold.

(Reporting by Clara Ferreira-Marques, Editing by Kylie MacLellan)