Asian tycoons, funds back Pru's record cash call

LONDON (Reuters) - Hong Kong tycoons have emerged as among the biggest supporters of a record $21 billion rights issue by Britain's Prudential (PRU.L), sources with direct knowledge of the matter said on Thursday.

Britain's largest insurer, raising cash to fund the planned $35.5 billion acquisition of U.S. insurance giant AIG's (AIG.N) Asian life arm, has pulled in a long list of banks and institutions to underwrite the deal.

But Pru, its focus shifting eastwards under the deal to become the largest foreign-owned insurer in Asia, has also wooed Asian investors in the hope of diversifying a UK-centric shareholder register.

Most institutions that agreed to sub-underwrite the deal were UK funds that already make up the bulk of Pru's shareholders, but Asian investors were the second-largest group, with Asia's tycoons leading the charge, the sources said.

Prudential would benefit from money already set aside when AIG was considering an Initial Public Offering (IPO) of its Asian unit, Chief Executive Tidjane Thiam said on Monday when the prospectus for the deal was released.

The sources did not comment on local media reports that Hong Kong billionaire Li Ka-shing and property tycoon Cheng Yu-tung were among those on the list.

Hong Kong's richest, including Li and Cheng, stepped in to underwrite a large chunk of HSBC's (HSBA.L) cash call last year.

The lead banks on the deal are Credit Suisse (CSGN.VX), J.P. Morgan Cazenove (JPM.N) and HSBC (HSBA.L).

The sub-underwriting closed on Monday, hours after the Pru released the delayed details of its rights issue and offer, and the sources said demand was considerably in excess of supply with "some scaling back."

Prudential's bankers are hosting meetings for the sub-underwriters on Friday and Tuesday in London, with attendance from Thiam and other top executives, one of the people said.

Asian institutions are also well represented among the sub-underwriters, the sources said.

Qatar Holding, the prime vehicle for strategic and direct investments by the State of Qatar, and the Government of Singapore Investment Corp GIC.UL, which owns a 0.5 percent stake in Prudential according to Reuters data, are named in the prospectus as underwriters. One of the sources said GIC was expected to be looking to raise its stake.

A separate source familiar with the matter said Singapore state investor Temasek TEM.UL has been in talks about taking a stake in the insurer, but has not made a final decision.

Temasek declined to comment.

Pru, which is listing in Hong Kong and Singapore, said earlier this week it would raise the fee paid to institutions sub-underwriting the deal.

"It's a big transaction and people are scrutinizing the prospectus," one of the sources said. "Some investors still require more analysis for comfort."

The unexpected delay to Pru's offer, after Britain's Financial Services Authority forced it to tweak its $35.5 billion offer for AIA in an unprecedented last-minute delay, has irked many of its shareholders.

Pru's management has since been on a roadshow to woo back investors to both the rights issue and the deal itself.

(Additional reporting by Victoria Howley, Myles Neligan and Quentin Webb in London and Saeed Azhar in Singapore. Chris Vellacott reported from Zurich through the London bureau; Editing by David Cowell)