25th Feb 2020 09:19
(Alliance News) - Prudential PLC on Tuesday confirmed it has received a letter from shareholder Third Point LLC and said that it would start a dialogue with the investor regarding its views outlined in the letter.
US hedge fund Third Point holds a 5% stake in FTSE 100-listed Prudential.
Prudential's statement comes after the hedge fund, owned by billionaire investor Daniel Loeb, sent a letter calling for the life insurance company to separate its US and Asian businesses Prudential Corp Asia and Jackson National Life. Third Point quoted the disappointing performance of the combined entity as the reason for the proposed changes, saying that Prudential's shares had underperformed those of Asian rival AIA Group Ltd by 80% over the past five years.
"If PruAsia and Jackson were separated, resulting in a greater focus on reinvesting capital in each unit and streamlining central costs at the group level, our analysis indicates that the interests represented by Prudential shares can double within three years," Third Point said in its letter issued on Monday.
It also said that there was no "strategic rationale" for Prudential to be listed in London, demanding it ends its 172-year presence in the UK as it no longer has operations in the country, having spun off M&G PLC in October 2019.
On Tuesday, Prudential said that will provide an update on its performance and strategy in its 2019 results, scheduled to be published on March 11.
Prudential shares were trading 1.7% higher at 1,444.20 pence each on Tuesday morning in London.
By Ife Taiwo; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Prudential