Auchan buys slice of Egg's ailing French arm for £96m

Egg, the online bank owned by Prudential, said yesterday it had sold part of its loss-making French business for up to £96m in cash.

Egg, the online bank owned by Prudential, said yesterday it had sold part of its loss-making French business for up to £96m in cash.

The French retailer Auchan, through its Banque Accord division, has agreed to buy the unsecured lending assets of Egg's French business, taking on 66,000 Egg customers and assets of about £141m. The amount Egg receives will depend on the value of the portfolio on completion of the deal, but Egg expects to take a £45m charge for disposing of the assets.

Egg's unsuccessful foray into the French market has weighed on the performance of the bank, and on Tuesday it reported a loss before tax of £103m. Egg's UK division continues to be profitable, but its French operations incurred a £35m operating loss. Prudential owns 79 per cent of Egg, and the insurer had hoped to sell off the entire business.

Prudential has had its own troubles, surprising shareholders this week by announcing a £1bn rights issue. The company was the subject of takeover rumours yesterday, with HBOS considered a possible candidate. Shares in Prudential rose 4 per cent on the speculation, prompting HBOS to issue a statement to the London Stock Exchange denying any interest in the company. After the statement Pru's shares fell back, closing up 1.5 per cent at 392p.