NEW YORK (Bloomberg) — American International Group Inc., the bailed-out insurer, remains in negotiations to salvage the sale of its main Asia unit after Prudential Plc requested a lower price to win shareholders' approval.

Prudential asked that the $35.5 billion price for AIA Group Ltd. be cut to about $29 billion to $30 billion, and New York- based AIG is seeking at least $32 billion, said a person with knowledge of the talks who declined to be identified because they are private.

In the UK, The Sunday Times reported that Prudential won backing for the deal from investors provided it can cut the price by more than 10 percent.

AIG was forced to reopen negotiations when some of London- based Prudential's biggest shareholders said they may reject the transaction at a June 7 meeting. The US Treasury Department, which helped rescue AIG in 2008, said it hadn't considered alternatives to the original terms as of late May 28, and AIG signalled it has other options for AIA, according to a person briefed on the stance of management.

"They need to get the price down, otherwise there's no deal," Julian Chillingworth, who helps manage $21 billion including Prudential stock at Rathbone Brothers Plc in London, said in a telephone interview yesterday. "We're looking for a meaningful reduction. The market's roughly 10 percent lower than when they started the deal, so you need a reflection of that plus a bit more."

Andrew Williams, a spokesman for Treasury, said May 28 that the department hasn't weighed alternatives to the $35.5 billion contract announced in March and that "AIA is a valuable business for which there is significant interest." Joe Norton, a spokesman for AIG, didn't immediately return a call seeking comment. Prudential's Edward Brewster declined to comment.

Prudential chief executive officer Tidjane Thiam, 47, needs 75 percent of investors to support a rights offer at the insurer's annual general meeting. Prudential investors including BlackRock Inc. and Fidelity Investments said the takeover was too expensive, a person with knowledge of the matter said last week. Thiam is in the US this weekend.