(Alliance News) - Prudential on Sunday said it plans to raise up to around USD2.89 billion on the Hong Stock Stock Exchange.
The London-based insurer is planning a share offer of up to 5% of its issued share capital, or around 130.8 million shares, at a price of no more than HKD172 each, equivalent to around USD22.09.
The offer will consist of a international share placing and a public offer available only to residents of Hong Kong, both at the same price. The public portion will be for up to 32.7 million of the total shares on offer.
Prudential said it wants to increase its Asian shareholder base and the liquidity of its shares in Hong Kong.
"The proceeds are expected to maintain and enhance Prudential's financial flexibility in light of the breadth of opportunities to invest for growth in Asia and Africa. Specifically, USD2.25 billion (approximately HKD17.5 billion) is expected to be used to redeem existing high coupon debt, with the remaining net proceeds expected to contribute to Prudential's central stock of liquidity," the company said.
Prudential last week completed the spinoff of US arm Jackson Financial Inc and declared a demerger dividend. The company still owns 20% of Jackson, and plans to cut its stake to less than 10% over the next 12 months.
Chief Executive Mike Wells said: "Prudential is now entirely focused on long-term structural growth opportunities in Asia and Africa. This share offer will maintain and enhance Prudential's financial flexibility in light of the breadth of opportunities to invest for growth.
"As we undertake the next stage of Prudential's development, we strive to deliver profitable growth in a socially responsible way, digitise our products and services, and humanise our company and advice channels."
The share offer is being led and underwritten by Citi, Goldman Sachs, CLSA and HSBC, alongside BofA Securities, Credit Suisse, UBS and UOB Kay Hian.
Prudential launched its Hong Kong-focused offer ahead of a weak day for the Hong Kong market, with the Hang Seng down 3.5%. Prudential shares were down 4.2% early Monday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.8% at 6,899.24
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Hang Seng: down 3.5% at 24,041.72
Nikkei 225: Tokyo closed for Respect for the Aged Day holiday
DJIA: closed down 166.44 points, or 0.5%, at 34,584.88
S&P 500: closed down 40.76 points, or 0.9%, at 4,432.99
Nasdaq Composite: closed down 137.96 points, or 0.9%, at 15,043.97
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EUR: down at USD1.1714 (USD1.1734)
GBP: down at USD1.3704 (USD1.3752)
USD: down at JPY109.85 (JPY109.92)
GOLD: down at USD1,751.28 per ounce (USD1,754.70)
OIL (Brent): down at USD74.82 a barrel (USD75.06)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
Japan Respect for the Aged Day. Financial markets closed.
1100 BST Ireland goods exports and imports
1000 EDT US NAHB housing market index
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The US and Britain sought Sunday to smooth tensions with Paris over a new security pact with Australia, with US President Joe Biden requesting early talks with his French counterpart Emmanuel Macron. The announcement of the defence alliance, and Australia's related decision to tear up a deal to buy French submarines in favour of American nuclear-powered vessels, sparked outrage in Paris, with Macron recalling France's ambassadors to Canberra and Washington in an unprecedented move. But on Sunday, UK Prime Minister Boris Johnson tried to downplay France's concerns about the deal, saying the pact was "not meant to be exclusionary...it's not something that anybody needs to worry about and particularly not our French friends". Biden has requested a phone call with Macron, French government spokesman Gabriel Attal said, which would happen "in the coming days".
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UK PM Johnson said "we'll have to do everything we can" to prevent energy companies going under as wholesale gas prices surge in the UK. OGUK, representing the offshore oil and gas industry, reported wholesale prices for gas have surged 250% since January – with a 70% rise since August alone. The rise in gas prices has been blamed on a number of factors, including a cold winter which left stocks depleted, high demand for liquefied natural gas from Asia, and a reduction in supplies from Russia. Speaking to broadcasters on the tarmac of New York's JFK airport, Johnson said: "I think people should be reassured in the sense that yes there are a lot of short-term problems not just in our country, the UK, but around the world caused by gas supplies and shortages of all kinds." It comes with UK Business Secretary Kwasi Kwarteng due to hold a fresh round of crisis talks with the energy industry. The Financial Times reported the industry wants the creation of a so-called "bad bank" to absorb unprofitable customers from firms that fail.
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The average price tag on a UK home hit a new record high of GBP338,462 in September. The new asking price peak across Britain is just GBP15 higher than a previous record set in July, Rightmove said. The average asking price for a home increased by 0.3%, or GBP1,091, month-on-month in September. Five nations or regions – Wales, South West England, the East Midlands, the East of England and the South East – are experiencing annual asking price growth of more than 8%.
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Coronavirus vaccines are being rolled out to children aged between 12 and 15, with three million youngsters eligible across the UK. The programme is expected to be delivered primarily within schools, and guidance has been issued to headteachers to contact police if they believe protests could be held outside their buildings. Children will be offered jabs at some schools in England from Monday. The rollout for 12 to 15-year-olds is also beginning in Scotland and Wales this week.
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Thousands of workers in Ireland will on Monday return to the office for the first time in more than 18 months, as restrictions on working from home are eased. From Monday, staff will go back to offices throughout the country in a phased and staggered basis, marking a big step in Ireland's exit out of lockdown restrictions. In guidelines published by the Dublin government, employers have been urged to develop a long-term return to work policy, which will allow for workplaces to open for "specific business requirements". For many workers, it will be the first time they will step back into an office since March 2020, marking an end of full-time working from home. Other restrictions will lift from Monday including an increase in the number of people allowed to attend indoor dance, yoga, pilates studios, art classes and indoor sports and fitness classes, provided people are immune from the disease.
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US Treasury Secretary Janet Yellen pleaded on Sunday for Congress to raise the debt ceiling in order to avoid a "historic financial crisis". In an editorial published in the Wall Street Journal, Yellen points out that the US has always raised the debt ceiling before exceeding its limit. "The US has never defaulted. Not once. "Doing so would likely precipitate a historic financial crisis," Yellen wrote. The debt ceiling, which only Congress can increase, came back into force on August 1 after it had been suspended for two years. It prohibits the US from borrowing more than the current USD28.4 trillion limit if not raised.
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BROKER RATING CHANGES
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BERENBERG CUTS BHP GROUP TO 'HOLD' (BUY) - PRICE TARGET 2,300 (2,700) PENCE
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BARCLAYS CUTS ANGLO AMERICAN TO 'EQUAL WEIGHT' (OVERWEIGHT) - TARGET 2,700 (3,600) PENCE
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RBC RAISES JD SPORTS PRICE TARGET TO 1,325 (1,150) PENCE - 'OUTPERFORM'
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COMPANIES - FTSE 100
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Two takeover targets, Wm Morrison Supermarkets and aerospace firm Meggitt, join the FTSE 100 on Monday, replacing Just Eat Takeaway.com and engineer Weir Group. Just Eat was removed for being too Dutch a year and a half after its acquisition by Takeaway.com.
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SSE noted a report in the Telegraph that said the energy firm was close to being split into two separate blue-chip companies, following pressure from US activist investor Elliott Management. Elliott has been in talks with SSE's board to split the company's legacy wholesale networks business from its growing renewable energy operations for more than a year, according to the Telegraph, citing sources close to the situation. In response, SSE said "there has been no decision to break up" the company. SSE remains fully focused on strategic choices which will "drive shareholder value from the wealth of net zero opportunities", it insisted. SSE said its strategic focus was on renewables and regulated electricity networks, supported by "carefully chosen" businesses.
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Royal Mail is to trial two types of micro electric vehicles for delivering letters and small parcels in a move aimed at stepping up its drive to further reduce emissions. The vehicles, roughly the size of a golf buggy or a quad bike, will be assessed in residential areas as a potential lower carbon alternative to larger vans. They have been specially designed to help postal staff deliver letters and smaller parcels on their daily rounds. The six-month trial will see a selection of vehicles operating in Edinburgh, Crewe, Liverpool, Swindon and London.
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COMPANIES - FTSE 250
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Victrex said it has appointed Vivienne Cox as a non-executive director and the chair-designate of the board, to succeed the outgoing chair, Larry Pentz. Pentz will step down from the board at the 2022 annual general meeting after nearly eight years as chair, Victrex explained. Cox started her career at oil major BP where she became CEO of BP Alternative Energy, establishing and developing the company's renewable energy businesses. Victrex added that Cox's appointment will be effective from December 1 as a non-executive director, as chair-designate from January 1, and as chair following the annual general meeting on February 11, 2022.
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COMPANIES - MAIN MARKET AND AIM
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Eurowag confirmed its intention to proceed with an initial public offering on the Main Market of the London Stock Exchange. Founded in the Czech Republic in 1995 by CEO Martin Vohanka, Eurowag processes toll and fuel payments for trucks around the continent. Eurowag said the IPO will comprise both new shares, raising around EUR200 million gross for the company to support its growth strategy, and existing shares to be sold by current Eurowag shareholders. Eurowag is targeting a free float of at least 25% of issued share capital and expects to be eligible for inclusion in FTSE UK indices. Eurowag said the IPO is to be led by Citigroup and Morgan Stanley, together with Jefferies, Numis and UBS.
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Monday's Shareholder Meetings
BlueRock Diamonds PLC - GM re convertible bond
Cohort PLC - AGM
Home REIT PLC - GM re issue of new shares
IG Design Group PLC - AGM
Redde Northgate PLC - AGM
SDCL Energy Efficiency Income Trust PLC - GM re share issue
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By Tom Waite; thomaslwaite@alliancenews.com
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