UPDATE 1-Market Chatter-Corporate finance press digest

Last Updated: Mon, Dec 17, 2012 06:00 hrs

Dec 17 (Reuters) - The following corporate finance-related stories were reported by media on Monday:

* American International Group Inc may raise as much as $6.5 billion from the sale of its remaining stake in AIA Group Ltd in Asia's second-largest block sale ever, sources with direct knowledge of the plan told Reuters.

* Commodity trader Trafigura is working on plans for a listing on the London Stock Exchange of its Puma Energy subsidiary, The Sunday Times reported, citing Puma's chief executive.

* KKR & Co has finished raising its second pan-Asia fund, reaching $6 billion, according to sources, the largest private equity pool ever raised for the region, with strong demand from pension funds and endowments seeking emerging market returns.

* Etihad Airways PJSC will decide this week whether to invest in India's Jet Airways or Kingfisher Airlines Ltd, both of which are competing for a lifeline from the national airline of the United Arab Emirates in return for selling an equity stake.()

* The London Stock Exchange will likely finalise its acquisition of clearing house LCH.Clearnet by the end of March, LSE Chief Executive Xavier Rolet told Italian daily Il Sole 24 Ore on Sunday.

* Gas distributor China Gas Holdings Ltd plans to buy London-listed Fortune Oil's gas business in China for HK$3.1 billion ($400 million), sources with knowledge of the deal told Reuters.

* Weeks before accepting a $1 billion buyout offer from Facebook Inc, Instagram CEO Kevin Systrom had verbally agreed to a $525 million offer from Twitter, according to a report in The New York Times citing unnamed sources close to Twitter and Facebook.

* Networking equipment company Cisco Systems Inc has hired Barclays to sell its Linksys home router unit, Bloomberg reported.

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