Pru's record £14.5bn cash call launched after delays

BRITAIN'S largest insurer Prudential has launched the UK's biggest ever rights issue as it tries to get its controversial £24.6bn takeover of AIG's Asian business back on track.

The 14.5bn cash call should have been launched two weeks ago but was delayed after the Financial Services Authority raised concerns about the capital strength of the company.

Prudential's chief executive Tidjane Thiam yesterday laid out his agreement with the financial watchdog, a key step to rescue the deal.

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While shareholders remained sceptical of the heavily discounted share sale, Mr Thiam was confident about plans to make Prudential the largest foreign-owned insurer in rapidly growing Asia.

"We were a little bit like a fighter fighting with one arm behind his back," he said.

"We were handicapped, we weren't able to answer a lot of questions.

"Overall we feel confident shareholders will support this.

"We always knew this would be a long, complex and challenging process. What we are attempting has never been attempted before."

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The takeover would give Prudential around 30 million customers in Asia and see the Asian operation become by far the group's biggest division, contributing around 60 per cent of new business profit.

Mr Thiam did not comment on speculation that the takeover will lead to the disposal of the company's UK operations.

The offer price for the new shares in the rights issue represents a 40 per cent discount to the prevailing market price.

The takeover of AIG's Asian business needs 75 per cent shareholder support to secure the deal.

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One leading institutional investor said: "The vote is a really, really difficult one to call.

"It's a big issue and we are at a very volatile point in markets."

Shareholders will vote on the deal on June 7.

Despite speculation on the market, frantic negotiations over the past few weeks have not resulted in changes to the value of Prudential's record offer, but it has tweaked the terms to boost the level of capital held by the group and reassure regulators.

n Insurance and investment firm LV= is to recruit 300 staff at locations including Bournemouth, London, Huddersfield, Hitchin and Bristol.

Many of the roles will be based in the company's general insurance division and include positions in sales, customer services, claims and technical management.

The firm employs 4,000 people.

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