Prudential set to offer shares at 40 per cent discount

The life insurer Prudential will today attempt to entice investors to back its £14bn cash call with new shares being offered at a 40 per cent discount. The rights issue, which will price this morning, is being launched to fund the $35.5bn (£23bn) takeover of AIA – AIG's Asian businesses. Prudential has been battling to convince its shareholders of the merits of the deal, which will transform the company into Asia's biggest insurance group if successful.

The prospectus and offer document, published today, will provide the basis for a charm offensive to investors. Some have suggested the company should instead be broken up and sold, with Clive Cowdery, boss of Resolution, casting avaricious eyes at the UK operation. He would like to combine it with Friends Provident, the smaller life insurer he took over last year as the first step in his ambitions to create a UK "super-insurer". Prudential needs 75 per cent support, and this has been called into question after Capital Research & Management, its biggest investor, voiced misgivings.