UK insurer Prudential sets pricing in US$2.4 billion Hong Kong stock placement

Name: Hong Kong can't miss Greater Bay Area boat in post-Covid-19 recovery, Victor Fung of Fung Group says
Uploaded: 2021-09-26T11:15:28.000Z
Duration: 10 min 1 s
Description: Hong Kong can't miss Greater Bay Area boat in post-Covid-19 recovery, Victor Fung of Fung Group says

UK insurer priced 130.8 million shares at a 2.6 per cent discount to its Hong Kong closing price on Friday

Stock offering comes days after insurer spun off its US unit Jackson Financial in a demerger exercise

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Chad Bray

Published: 7:15pm, 26 Sep 2021Updated: 10:53pm, 26 Sep 2021

Prudential, the biggest UK insurer by market value, said it expects to raise HK$18.5 billion (US$2.4 billion) from a share placement in Hong Kong to repay older debt and fund its global expansion.

The London-based company plans to sell up to 130.8 million shares at HK$143.80 each, representing a 2.6 per cent discount to its closing price of HK$147.70 in Hong Kong on Friday. The firm last week indicated selling the stake at no higher than HK$172 each.

“Prudential is a growth business exclusively focused on the unmet health, financial protection and savings needs of people in Asia and Africa,” chief executive Mike Wells said in a statement. “Our share offer allows investors to join us on our journey as we execute our strategy, which we believe will result in long-term delivery of future shareholder returns.”

Prudential, which targeted to raise as much as US$2.9 billion in the offering, has a market value of about US$49.8 billion, topping home rivals like Legal & General, Aviva and Phoenix Group, according to Bloomberg data.

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Hong Kong can't miss Greater Bay Area boat in post-Covid-19 recovery, Victor Fung of Fung Group says

Most of the proceeds – US$2.25 billion – are expected to be used to redeem existing high coupon debt within six months, the company said. Its nearest maturity bond is a £300 million (US$410 million) 6.875 per cent note due in January 2023. The remainder will be used to “further increase Prudential’s financial flexibility.”

Some 6.5 million of the placement shares are being offered to retail investors in Hong Kong, though that tranche could be increased depending on demand. The stock has risen 3.1 per cent in the city this year, compared with a 9 per cent decline in Asia rival AIA Group.