Prudential offers to buy balance stake in Egg |
|
|
Published
:
Thu, 01 Dec 2005 14:05
|
LONDON: Insurance company Prudential Plc. is buying out the 21 per cent holding in online bank Egg Plc. at 118 pence a share, a 15 per cent premium on the bank's recent closing share price.
Egg's board has backed the offer, which gives Egg's investors 0.2237 shares in the enlarged Prudential group for each Egg share they own. The offer values Egg at 973 million pounds, against its current market cap of 845 million pounds.
Prudential believes that the buyout will help it achieve 40 million pounds in annual cost savings by end-2007. The insurer's chief executive Mark Tucker said the deal will boost the company's revenues by integrating Egg more closely with its own insurance operations, and with asset management division M&G.
Prudential had given up a seven-month search to sell its holding in Egg in 2004 under the then CEO Jonathan Bloomer on the face of investor protests. Bloomer left the company and Tucker, who took over from him, wanted to expand Prudential's business beyond life insurance. Egg, under Prudential's full control, will be more effective, feels
Tucker.
The company said it will close the offer in January and delist the company on the London Stock Exchange.
Analysts have described the deal as strategically sensible.
Egg's shares were up 14 per cent, at 116.75 pence in opening deals on the London Stock Exchange. The company was listed in 2000 at 160 pence a share, which reached a high of 194 pence in 2004.
Prudential fell 6.5 pence to 521 pence.
|
|
|
|
|
|
|
| Stock
Quotes * |
|
NASDAQ
|
|
1628.03 |
-4.18 (
-0.26 %)
|
| SYMBOL (
2009-01-05 ) |
| LAST |
CHANGE
|
|
LONMIN
(
11:35am )
|
|
1079.00 |
+54.00 (
5.05 %)
|
| SYMBOL (
2009-01-05 )
|
| LAST |
CHANGE
|
| SYMBOL (
2009-01-05 )
|
| LAST |
CHANGE
|
|
GOOGLE
(
4:00pm ) |
|
328.05 |
+6.73 (
2.10 %)
|
|
|
Print this Story
Bank your cash in the best fund possible 