Prudential shares fall as Jackson demerger shifts to second half
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[May 13, 2021] LONDON
(Reuters) - Shares in Prudential fell 5% on Thursday as the life insurer
said the spin-off of its U.S. business would not take place until the
second half.
Analysts were expecting the demerger, announced last year following
pressure from activist investor Third Point, to take place this month.
Prudential had previously said the demerger would take place in the
second quarter.
The company said that while regulatory approvals for the demerger had
been received from Michigan and New York, "regulatory engagement" was
continuing so detail on Jackson's first-quarter performance could be
included.
"The U.S. demerger will complete Prudential's structural transformation
into a business solely focused on the growth opportunities of Asia and
Africa," chief executive Mike Wells said in a trading statement ahead of
the company's annual general meeting on Thursday.
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Prudential's shares were down 5.4% at 0930 GMT, one of the worst
performers in the FTSE 100.
Jefferies analysts described the demerger delay as "disappointing",
while retaining their "buy" rating on the stock.
Wells said that while vaccination roll-outs should bring "a gradual
return to more normal economic patterns", uncertainty remained over the
speed of roll-outs and their success.
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![](../images/051321pics/busine19.jpg)
The logo of British life insurer Prudential is seen on their
building in London, Britain March 17, 2019. REUTERS/Simon
Dawson/File Photo
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New business profit in the life insurer's Asia and Africa operations rose by 21%
to $624 million in the first quarter, helped by strong performance in China.
Asia and Africa annual premium equivalent (APE) sales rose 14% to $1.2 billion.
Jackson's first-quarter new business premiums were in line with the second half
of 2020 and sales of variable
annuities were up. Sales of fixed index annuities and fixed annuities in the
same period remained at historically low
levels following earlier pricing actions, the company said.
Prudential reiterated that it planned a $2.5-3 billion equity raising once the
demerger is completed, likely to be through a global offering to institutional
investors and a public sale in Hong Kong to retail investors.
Prudential also said it would consider a preferential offering to Hong
Kong-resident eligible employees and agents.
(Reporting by Carolyn Cohn, editing by Kirstin Ridley and Jane Merriman)
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