British insurer Prudential has been forced to abandon the launch of a $21 billion rights issue in a deeply embarrassing move that could prove the last straw for some investors wavering over the British life insurer’s $35.5 billion takeover of AIG’s Asian arm.
The Pru canned its prospectus at the last minute after failing to convince UK regulators that it would have enough capital after the takeover, with up to $3 billion of AIA’s capital base locked into several Asian countries.
The company insisted that the timetable for its deal remained on track while people close to the Pru were hopeful that concerns of the Financial Services Authority could be satisfied within a couple of days.
However, others said that the Pru had a much deeper problem with the regulator. The FSA was concerned that it would not have proper oversight of a company heavily biased towards Asia, they suggested.
It was also worried about another complex cross-border deal going wrong following RBS’s disastrous acquisition of the Dutch bank ABN Amro in 2007. – (Copyright The Financial Times Limited 2010)
