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Prudential releases details of record rights issue

PRUDENTIAL has announced details of its record £14.5bn (£21bn) rights issue aimed at funding its planned acquisition of AIA Group.

The move for AIG's Asian business has been dogged by controversy after some shareholders questioned the move.

The Financial Service Authority also caused a delay in the launch of the prospectus for the rights issue after taking extra time to scrutinize the deal.

But the issue of the prospectus puts the deal back on track.

Prudential said in the document it will sell new shares at 104 pence, a 39 per cent discount to the theoretical ex-rights price (TERP), as chief executive Tidjane Thiam hopes to woo wary investors.

Prudential said it would offer its owners 11 new shares for every two shares held.

The company also gave targets of new business profit revenue synergies of $800m pre-tax and pre-tax cost synergies of $370m during 2013 and remittances of at least $1bn per year from the AIA group in 2011 and onwards.

Prudential's chairman Harvey McGrath called the proposed deal "a unique opportunity".