Prudential is thought to be drawing up plans to sell its UK business, after an investment analyst's note claimed that Prudential's chief executive is set to take action about the flagging business, according to The Times.
A note from James Pearce, an analyst at JPMorgan Cazenove, claimed that Mark Tucker, chief executive of the London, UK-based international financial services group, was poised to take decisive strategic action to resolve operational problems in the UK.
According to The Times, shares in Prudential jumped more than 5% after the note – which stated The strategy of operational improvement has not delivered in the UK…and needs to change – made it clear that the Prudential’s 158-year old UK business is at a crossroads.
Mr Pearce is reported to have said in the note that Prudential is likely to set a price of 124% of its embedded value which would put the UK business at approximately GBP6.9 billion.
The note is reported to have stated: We think that there is a good chance of a disposal of the UK life operation within this range.
Although a Prudential spokesman said that the company would not comment on market speculation, Mr Tucker is believed to have indicated to the city that a decision could be announced within the next few months.
An unnamed source reportedly told The Times: Various conversations have strengthened my view than something is going to happen, and speculation is now rife among analysts.
Internationally, US-based Prudential Financial is reportedly close to paying a $19 million settlement to the New York Attorney General’s Office, to resolve an investigation by New York authorities that the insurer made improper payments to brokers for business.