Prudential plans partial IPO of US Jackson business
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14:45 19/04/24
Prudential announced plans for a partial public offering of its US business as the insurer reported a 20% increase in adjusted operating profit.
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The FTSE 100 company said it planned to sell a minority stake in its Jackson US business to investors in an initial public offering. Prudential has come under pressure from activist investor Third Point to spin off the whole of the US business after splitting off its UK division in 2019.
Mike Wells, Prudential's chief executive, said: "In order to diversify at pace, Jackson will need access to additional investment, which we believe would best be provided by third parties. Today we are announcing that preparations have commenced for a minority IPO of Jackson … We will now commence detailed engagement with our key stakeholders."
Prudential shares rose 2.4% to £11.24 at 09:23 GMT.
Adjusted operating profit for the year to the end of December rose to $5.3bn (£4.1bn) from $4.4bn, beating analysts' average estimate of $5.1bn. The increase was driven by a 14% rise in Asia adjusted operating profit to $2.99bn. US adjusted operating profit rose 20% to $3.1bn reflecting lower amortisation of deferred acquisition costs.
Prudential said the coronavirus outbreak had slowed sales in China and Hong Kong in 2020 and that there would be an impact on new business profit.
"The broad geographic spread of our business across the region and the strength of our recurring premium business model lends considerable resilience to our earnings," Wells said.
Third Point, run by US investor Dan Loeb, has called on Prudential to sell Jackson to concentrate on fast-growing Asian markets. Investors have questioned the dual Asia-US strategy for some time but have warned against a rushed disposal of the $10bn US business.