Sceptical shareholders await the Pru's AIA prospectus

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The Independent Online

Prudential will publish the prospectus for its $35.5bn acquisition of AIG's Asian business this week amid investor concerns about the deal and deteriorating market conditions.

Nearly two weeks after the Financial Services Authority (FSA) spiked the insurer's $20bn cash call, the regulator is expected to give the green light to the deal. It's believed that it will wave the proposals through after the Pru said it would cut the amount of cash it will pay for the AIA unit.

The under-fire chief executive, Tidjane Thiam, will present the plan to a largely sceptical City audience, possibly as early as tomorrow.

The FTSE 100 index slumped by more than 3 per cent on Friday. Investors said such conditions could force a further postponement. One fund manager who owns Pru shares, said: "If these headwinds carry on then the already slim chance of the rights issue getting through gets slimmer."

Another leading shareholder said there was a fear that management could try to circumvent the 75 per cent shareholder support level needed for the rights issue to succeed. "All hell will break loose if they try to pull a stunt," he said. "But nothing would surprise me. This has been a textbook example of how not to run a deal process."