Egg shares tumble as Pru halts buyer hunt

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The Independent Online

Online bank Egg is to remain under the control of the Prudential after the insurer today called a halt to its seven-month search for a buyer.

Online bank Egg is to remain under the control of the Prudential after the insurer today called a halt to its seven-month search for a buyer.

The news aparked a sharp fall in Egg share prices, which fell 33p to 11p by 11am.

Prudential received interest from a number of parties for its 79 per cent Egg stake but has now decided it could gain better value by staying put.

US-based financial groups Capital One and MBNA had been seen as among the front-runners to buy the business, which is valued at around £1.5 billion.

The Pru's stake in Egg dates back to the launch of the online bank in 1998.

Prudential chief executive Jonathan Bloomer said the company had an obligation to explore all options after announcing in January it had received approaches.

He added: "Our objective is to ensure that our shareholders benefit in full from the value inherent in Egg and we have concluded shareholders' interests are best served by retaining our Egg holding."

Since the Pru announced plans to sell the stake, the online bank has refocused itself back on the UK by taking steps to close its venture in France.

The closure move was taken after potential buyers told the Pru that the French division represented a barrier to a sale.

Last month, continued losses in France offset progress in the UK as Egg reported half-year losses of £4.1 million.

Egg chief executive Paul Gratton welcomed the end to uncertainty about his company's future ownership.

He said: "Now that the situation regarding our majority shareholder has been clarified, we remain confident that Egg is well-positioned to execute our business plan successfully and deliver value to shareholders."

It is expected to take around 18 months to wind down the French business, with Egg poised to take a charge of £113 million in annual results. Around 450 jobs in France will also go.

Egg employs 2,000 people in the UK in Derby, Dudley and London.



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