29th Jan 2007 10:52
Prudential PLC29 January 2007 Embargo: 10.45am Monday 29 January 2007 Sale of Egg Banking plc Prudential plc ("Prudential") announces that it has entered into a bindingagreement (the "Agreement") to sell Egg Banking plc ("Egg"), Prudential's UKbanking business, to Citigroup. Under the terms of the Agreement, the consideration payable to Prudential byCitigroup is £575 million in cash, subject to adjustment to reflect any changein net asset value between 31 December 2006 and completion. Prudential has also agreed in principle outline terms with Citigroup withrespect to a UK distribution agreement through which Prudential will providelife and pensions products to Egg's customer base for a five year period. Thisdistribution agreement will preserve the strategic benefits to Prudential ofaccess to Egg's direct distribution model and its customer base of over 3million. In addition, Prudential announces that it has been selected as a strategicprovider to Citigroup for the distribution of life insurance products toCitigroup's consumer banking customers in Thailand, Indonesia and thePhilippines. The transaction is subject to regulatory approvals and is expected to completeby the end of April 2007. The sale will enhance EPS in 2007. The proceeds will be used to reduce net debt.The transaction is expected to improve the Group's surplus under the FinancialConglomerates Directive by an estimated £300 million. Commenting on the sale, Mark Tucker, Group Chief Executive of Prudential, said:"The sale of Egg to Citigroup realises greater value for our shareholders thanretaining the business within the Group. Citigroup is the largest credit cardissuer in the world and sees enormous opportunities to develop Egg's business inthe UK." For the financial year ending 31 December 2006, Egg's operating losses oncontinuing ordinary activities before tax are estimated to be £145 million. As at 31 December 2006, Egg's gross assets and shareholders' funds are estimatedto be £9.5 billion and £276 million respectively. ENDS Enquiries: Media Investors/AnalystsJon Bunn +44 20 7548 3559 James Matthews +44 20 7548 3561WilliamBaldwin-Charles +44 20 7548 3719 Valerie Pariente +44 20 7548 3511Steve Colton +44 20 7150 3136 Notes to Editor: 1. There will be a conference call today for wire services at 11.30am (BST)hosted by Mark Tucker, Group Chief Executive, and Philip Broadley, Group FinanceDirector. Dial in telephone number: +44 (0)20 8609 0205. Passcode: 155439# 2. There will be a conference call for investors and analysts at 12.00am (BST)hosted by Mark Tucker, Group Chief Executive, and Philip Broadley, Group FinanceDirector. From the UK please call +44 (0)20 8609 0205 and from the US 1866 7934279. Pin number 487687#. A recording of this call will be available for replayfor one week by dialling: +44 (0)20 8609 0289 from the UK or 1 866 676 5865 fromthe US. The conference reference number is 160468. 3. About Egg Launched by Prudential in October 1998, Egg is an innovative financial servicescompany, authorised as a bank by the FSA and providing a range of banking andfinancial services products that are distributed via the Internet and phone. Egghas no branches. Egg focuses on offering banking products and services, specifically, personalloans, credit cards, mortgage loans, and deposit and savings accounts throughits operational subsidiaries. 4. About Prudential Prudential plc is a company incorporated and with its principal place ofbusiness in the United Kingdom, and its affiliated companies constitute one ofthe world's leading financial services groups. It provides insurance andfinancial services directly and through its subsidiaries and affiliatesthroughout the world. It has been in existence for over 150 years and has £237.5billion in assets under management as at 30 June 2006. Prudential plc is notaffiliated in any manner with Prudential Financial, Inc, a company whoseprincipal place of business is in the United States of America. Forward-Looking Statements This statement may contain certain "forward-looking statements" with respect tocertain of Prudential's plans and its current goals and expectations relating toits future financial condition, performance, results, strategy and objectives.Statements containing the words "believes", "intends", "expects", "plans","seeks" and "anticipates", and words of similar meaning, are forward-looking. Bytheir nature, all forward-looking statements involve risk and uncertaintybecause they relate to future events and circumstances which are beyondPrudential's control including among other things, UK domestic and globaleconomic and business conditions, market related risks such as fluctuations ininterest rates and exchange rates, and the performance of financial marketsgenerally; the policies and actions of regulatory authorities, the impact ofcompetition, inflation, and deflation; experience in particular with regard tomortality and morbidity trends, lapse rates and policy renewal rates; thetiming, impact and other uncertainties of future acquisitions or combinationswithin relevant industries; and the impact of changes in capital, solvency oraccounting standards, and tax and other legislation and regulations in thejurisdictions in which Prudential and its affiliates operate. This may forexample result in changes to assumptions used for determining results ofoperations or re-estimations of reserves for future policy benefits. As aresult, Prudential's actual future financial condition, performance and resultsmay differ materially from the plans, goals, and expectations set forth inPrudential's forward-looking statements. Prudential undertakes no obligation toupdate the forward-looking statements contained in this statement or any otherforward-looking statements it may make. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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