Doha/Singapore: Qatar Holding LLC and Singapore's biggest sovereign wealth fund GIC have committed to underwrite a significant portion of UK Prudential's $20 billion (Dh73.5 billion) rights issue.
GIC is an existing shareholder, with a 0.5 per cent stake in Prudential, but Qatar does not appear to rank as an existing investor, signalling that the British insurer is inviting new investors to make the deal a success.
Qatar Holding, the Doha-based arm of the Qatar Investment Authority, offered to buy $1.5 billion of stock if Prudential shareholders decline to buy it in the offering, said a person familiar with the deal. The fund is in talks about acting as a sub-underwriter for Credit Suisse Group AG, one of the sale's managers, the person said.
Prudential said on March 1 it would pay $35.5 billion in cash and stock for AIA Group Ltd, an Asian division of American International Group Inc. The British insurer is embarking on the biggest takeover in its 162-year history to expand in a region that it says is growing faster than its home market and benefits from higher rates of personal savings.
Finance
Prudential, which has a market value of about £13 billion (Dh71.8 billion), is financing the offer by selling shares and $5 billion of bonds. Credit Suisse, HSBC Holdings Plc and JPMorgan Cazenove Holdings agreed to underwrite in full the rights offering, which is slated to start in May.
"The joint global co-ordinators have confirmed that syndication since the announcement has been very well received, with demand for primary underwriting well in excess of the size of the rights issue," Prudential said in a regulatory filing in London.
