Prudential climbs amidst talk of break-up deal

Prudential (LON:PRU) has been the big mover on the FTSE 100 this morning, leaping as much as 3.85 per cent up following reports from the Times that the group’s biggest shareholder has been plotting to break-up the insurer.

Rob Hull
shareprices.com - Tuesday, April 27, 2010

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Prudential hit headlines this morning with reports of a potential break-up

Capital Group, which has a 12 per cent stake in Prudential, has hit headlines in the Times this morning with reports it has approached Resolution (LON:RSL), the UK’s second largest insurer Aviva (LON:AV.) and another unnamed party about a potential consortium bid.

The Times claims another one of the top ten shareholders would support the break-up idea, a move that could potentially scupper the Pru’s planned acquisition of Asian insurance giants AIA.

The reports boosted Prudential’s share price to a high of 567p at 08:06 after opening trading 1.92 per cent up following the news.

And analysts have said the speculation of a break-up comes as no shock as Prudential look to complete their deal with AIG to acquire its Asian insurance operations – a deal that will cost the Pru over £23bn.

A decision on the move into Asia will be discussed at a shareholder meeting in May.

After a brief drop, share price has recovered to 555.50 at 10:00BST this morning, still 1.74 per cent up.

The news has done very little to improve the share price for the two named insurers in the Times’ report.

Aviva has dropped by as much as 1.5 per cent this morning to a low of 366.89p and share price currently sits at 367.60.

Resolution is also down in this morning’s trading by as much as 1 per cent, but at 10:00BST share price is just about flat at 76.05p.

 

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