Q+A: How would Pru’s Asia listing work?

HONG KONG, April 27 (BestGrowthStock) – British insurer Prudential
Plc (PRU.L: ), which launched a $35.5 billion takeover of
American International Group Inc’s (AIG.N: ) Asian life insurance
business, aims to list in Hong Kong and Singapore on May 11.

The listings are aimed at drawing Asian investors to
Prudential’s $21 billion rights offering, which will play a
major role in funding the purchase of American International
Assurance (AIA).

The listings show the importance of Asia to Pru’s growth
going forward.

Standard Chartered Bank (STAN.L: )(2888.HK: ) and HSBC Holdings
(HSBA.L: ) (0005.HK: ) are two other examples of companies that
have taken the London-to-Hong Kong listing route. However,
listing by introduction is not so common.

Here is how the process works.

WHAT IS LISTING BY INTRODUCTION?

Unlike a conventional stock market float, listing by
introduction does not involve raising new capital. It’s a
process by which shares of a company, already trading on a
stock exchange, are made available for trading on another
exchange.

HOW DOES TRANSFER OF SHARES HAPPEN?

To start with, some of Prudential’s UK shareholders would
apply to the company to shift their shares to Hong Kong. To
make that easier, Prudential has set up an express shunting
process whereby the shares will be transferred to Pru’s Hong
Kong registrar within three days. That kind of transfer
normally takes about 11 days.

Credit Suisse, the sole sponsor, along with HSBC and JP
Morgan Cazenove, will be responsible for providing liquidity on
the Hong Kong and Singapore exchanges. Providing ample
liquidity was among the conditions both exchanges prescribed to
allow the listings.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For latest stories on Prudential, see:
[ID:nN0199388]

Pru investor could scupper AIA deal – report
[ID:nLDE63P2II]

BREAKINGVIEWS-Questions for Pru s’holders
[ID:nLDE63P0LL]

Prudential sees Asia listings on May 11
[ID:nLDE63M06F]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

WHEN WOULD TRANSFER OF SHARES BEGIN?

The transfer of shares will be completed in five batches,
with the first set to arrive on May 7. The three brokers
involved in the process have arrived at an undisclosed amount
of shares that will be transferred from London to have a deep
pool of shares available for orderly trade.

IS THERE A COST INVOLVED IN THE TRANSFER OF SHARES?

There is a nominal cost attached to the transfer, which
will be absorbed by the company in the first month.

WHY WOULD INVESTORS WANT TO SHIFT SHARES TO HK/SINGAPORE?

There are several Asia-focused funds that have bought the
London shares with a view to transfer to Hong Kong ahead of the
rights offer. Some analysts expect the Hong Kong shares to
trade at a premium initially, though in the long-run the
arbitrage will disappear as the shares are fully fungible.

WHAT WILL PRU’S HK SHARES START TRADING AT?

The opening level of Prudential’s Hong Kong shares will be
determined by their London close on May 10. Theoretically, the
opening level of the Hong Kong shares will be the Monday close
in London multiplied by the conversion rate.

HOW MUCH OF PRU’S UK SHARES ARE LIKELY TO MOVE TO HK?

Analysts estimate that about a third of Prudential’s total
market capitalisation will migrate to Hong Kong and Singapore
over the next three years. That is based on expectations that
an enlarged Prudential will drive a good part of the business
from Asia.

WILL PRU BE PART OF THE HK BENCHMARK INDEX?

Prudential’s Hong Kong shares will not be a member of the
local benchmark index right away. But, as more shares migrate
to Hong Kong, the stock could be added to the main index over
time.

Investing

(Reporting by Denny Thomas and Kennix Chim;

Q+A: How would Pru’s Asia listing work?