Prudential to fast track its Hong Kong listing

Steve Dinneen
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PRUDENTIAL will rush through its Hong Kong listing in a bid to underpin its record breaking £14bn rights issue.

The insurer hopes the announcement yesterday will help avoid a shareholder backlash by attracting Asian investors to shore up its share price before embarking on the mammoth fundraising. The Pru will also hope the news will convince existing shareholders they will not be forced to carry the weight of the deal by themselves.

The insurer is on the verge of an audacious takeover of the Asian operations of American International Group in a deal valued at £23bn.

But shareholders are sceptical about the amount they are being asked to stump up and the 75 per cent approval rating the insurer needs for the deal to go ahead could be in jeopardy.

Merrill Lynch analyst Blair Stewart yesterday wrote that “shareholder approval of the deal should not be seen as a given.”

The insurer will now begin a charm offensive aimed at convincing existing shareholders of the long-term value of the deal.

It was buoyed by the news last week that the Qatar sovereign wealth fund and GIC, Singapore’s state fund, will underwrite the rights issue.