Britain’s Prudential to Launch Delayed $21B Rights Issue

FT is reporting that Prudential Financial, Inc. (PRU), a financial services company with nearly $700 billion of assets under management, is preparing to launch its delayed $21 billion rights issue on Monday morning, allowing the insurer’s chief executive Tidjane Thiam to make the financial case for the $35.5 billion acquisition of AIA, the distressed Asian operations of U.S. insurer AIG (AIG).

Britain’s largest insurer last week delayed the launch of its $21 billion rights offering after the U.K.’s Financial Services Authority raised concerns about the firm’s capital position, indicating they wanted Prudential to raise more capital to support the deal, which, when finalized, will make PRU the top non-Chinese global insurance firm by capitalization, notably ahead of Allianz and Axa.

FT also said that Prudential is expected to offer investors four new shares for each share they already own at 135p – 140p a share with the offering being near the bottom of the range given that Prudential shares have lost 16 pence since the issue was delayed and closed on Friday at 542.5p.

According to FT, details of the fundraising will be announced alongside financial information on the PRU and the Asian businesses of AIG, which Prudential agreed to pay for in March with $25 billion cash, $2 billion in preferred shares, and $8.5 billion in stock and equity.

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