In its Hong Kong share offer, Prudential, the Fortune 500 company whose subsidiaries provide insurance and investment management, intends to raise up to $2.4 billion after pricing the stock at a slight discount to its last Hong Kong close.
In a statement on Saturday, the conglomerate announced that it would sell up to 130.8 million shares at HK$143.80 ($18.43) each.
Mike Wells, Prudential’s chief executive, said the firm will extensively invest in Asia and Africa to allow for “long-term structural growth opportunities.” Prudential will use a portion of the proceeds of its offering to repay existing borrowings.
In Hong Kong, the proposed price represents a 2.6% discount to the last closing share price. Trading in the offer shares will commence, subject to approval, on 4 October, the company announced in a statement to Hong Kong’s stock exchange.
Prudential announced the completion of the demerger of Jackson Financial Inc. just over a week ago, an announcement that could strengthen Prudential’s competition with Asian rival AIA Group. The insurance giant, already among the biggest in Southeast Asia outside Thailand, will compete more aggressively against AIA in China, the world’s most populous country with the fastest growing middle class.
Boosting a strongly regulated market
Prudential’s share sale represents one of the largest offering of new shares in Hong Kong this year, helping to boost a market that has been hit by Beijing’s regulatory efforts. James Turner, the company’s chief executive, said last week that the regulatory focus is advantageous as the company aims to improve the quality of protection products sold to customers.
Turner said company executives have made no secret of their intent to increase their stake in their joint venture in China.
HSBC Holdings Plc, Citigroup Inc, Goldman Sachs Group Inc, CLSA Ltd, and Goldman Sachs Group Inc are the global coordinators of the offer. As joint bookrunners, Bank of America Corp., Credit Suisse Group AG, Citigroup AG and UBS Group AG are participating.