Prudential (PRU.L) has entered talks to cut its US$35.5 billion offer for AIG’s (AIG.N) Asian life insurance arm in a last-ditch bid to salvage a deal criticised by shareholders as too expensive.

The UK’s biggest insurer wants to cut the price to about US$30 billion, a reduction of 15%, said one source close to the deal, who asked not to be named.

AIG feels US$30 billion for AIA is too low and is not in a rush to do a deal, another source familiar with the matter said late on Friday.

AIG believes it has many options for AIA, as it views AIA as a “valuable property” and does not want to sacrifice value, the source said.

An AIG spokesman was not immediately available for comment.

Options such as an IPO for AIA may not be so attractive in the current volatile equity market. The insurance giant could, however, try to find other partners for a deal.

But the US Treasury Department, which bailed out American International Group Inc in 2008, said it has considered only a US$35.5 billion deal to divest the insurer’s main Asian unit to Prudential, Bloomberg reported.

The clock is ticking for Prudential, which faces a shareholder vote on the deal in little over a week, meaning negotiations are likely to intensify in the coming days.