Pru drops plan to sell Egg

Posted on 3 Aug 2004 at 12:56

Egg, one of the pioneers of Internet banking, is to remain safely in Prudential's nest. Plans to sell of the online bank have now been shelved, with Prudential concluding that the retention of its 79 per cent stake 'offers better value to its shareholders than the sale of Prudential's interest'.

Reported suitors included the credit card companies MBNA and CapitalOne, but no deal has transpired. 'We had an obligation to explore all the options for the business following the approaches we received,' maintained Prudential's Group Chief Executive, Jonathan Bloomer, explaining the volte-face.

'Our objective is to ensure that our shareholders benefit in full from the value inherent in Egg and we have concluded shareholders' interests are best served by retaining our Egg holding,' said Bloomer. 'Egg has brought significant change to the market, with a track record of delivering innovative products and services to customers. It is a very successful business in the UK with significant potential to grow in value.'

While prospering in the UK, Egg's fortunes have been hit by an unsuccessful venture into French banking. The intention is now to focus on the core UK business and close the French operation entirely.

On the London stock exchange, at the time of writing, Egg's share value has fallen on the back of the news by 24 per cent. Similarly, Prudential's share price has been hit, falling 3 per cent.

Author: Alun Williams

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