PRUDENTIAL chief executive Tidjane Thiam has said he will use his own money to back the insurer’s giant $21bn (£14.5bn) rights issue to raise funding for the acquisition of AIA.
Thiam and his board of directors came under fire after reports emerged they may not back the bid out of their own pockets.
According to the Pru’s prospectus they were given the option of undertaking a practice known as “swallowing the tail”, whereby they are allowed to sell some of their rights in order to take up the remainder.
To fully take part in the rights issue Thiam will have to stump up £1.5m.
A spokesperson said: “Every single director is either taking up their rights or swallowing the tail. No director is selling their rights for cash.”
The news came as the AIA deal hit yet another hurdle yesterday with the US Treasury said to be re-examining options to float the business instead.
The Treasury is understood to be worried about intense shareholder pressure on the Pru’s ambitious bid for the state-backed asset.
Treasury Secretary Timothy Geithner is publicly standing behind the offer but is keen to secure a second option in case the plans come crashing down. Failing to snap up the business would be a disaster for the Pru, which has already come under fire for paying banks the “obscene” sum of £850m in fees for orchestrating the deal.
This is the latest hitch in a gaffe-prone campaign to get the rights issue off the ground. Earlier this month the FSA left the Pru red faced when it raised concerns about the capital strength of the new company, although it later said it was satisfied.