Prudential Breakup Could Raise 24 Billion Pounds, Analyst Says BusinessWeek
By Kevin Crowley and Oliver Suess
April 28 (Bloomberg) -- Prudential Plc, the U.K.’s biggest insurer, should consider breaking up rather than buying American International Group Inc.’s main Asia unit for $35.5 billion, analysts and investors say.
Selling Prudential’s British, U.S., Asian and fund- management units could raise about 24.2 billion pounds ($37 billion), or about 75 percent more than the insurer’s market value, according to Barrie Cornes, a London-based analyst at Panmure Gordon & Co., who described his assumptions as “conservative.” The stock dropped 6 pence, or 1.1 percent, yesterday, valuing Prudential at 13.7 billion pounds.
The insurer’s biggest investor, Capital Research & Management Co., has held discussions with three companies including Aviva Plc and Resolution Ltd. about carving up Prudential’s assets, the Times of London reported yesterday. Chief Executive Officer Tidjane Thiam needs 75 percent of shareholders to support a $20 billion rights offer to fund the purchase of AIA Group Ltd. and will publish a prospectus to win over investors on May 5. Investors vote on May 27.
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