The Prudential can keep its London listing and expand abroad, says billionaire investor
The billionaire hedge fund boss who attacked the Prudential has been forced to back down over his demand to shift its listing from the London Stock Exchange.
Dan Loeb, who took a 5 per cent stake in the life insurer this week through his hedge fund Third Point, conceded that the Pru could maintain its London listing under his radical shake-up plan.
But he has refused to concede defeat on booting Prudential out of its HQ in the City, ending its 172-year presence in London.
Billionaire hedge fund boss Dan Loeb, who took a 5 per cent stake in the life insurer this week, conceded that the Pru could maintain its London listing under his radical shake-up plan
Loeb, who has been dubbed the ‘merchant of venom’ for calling out chief executives in scathing public letters, wrote to the Pru’s board this week lambasting its performance and calling for urgent action.
He wants the company, which now consists of an Asia division and a US annuities arm, to split into two separate businesses and ditch its London base.
He said last night that the Asian division could retain a secondary listing in the UK, meaning investors who own funds which track UK indices would be able to maintain stakes in the Pru.
But his attack blindsided its board, who had little inkling of Loeb’s plans.
The Pru said: ‘Prudential proactively engages with shareholders with regards to group strategy and structure, and looks forward to commencing a dialogue with Third Point with regard to the views outlined.’
Loeb, whose great-aunt Ruth Handler is credited with inventing the Barbie doll, has made his move at time of change for Prudential.
The firm is set to welcome Shriti Vadera, chairman of Santander and former adviser to Gordon Brown, to the board in May with a view to appointing her as chairman next January.
The Mail understands that Vadera will be kept in the loop regarding Prudential’s response to Loeb until she takes up her role. Prudential has refused to say how much credence it is giving to Loeb’s ideas.
But sparks could fly between the ruthless hedge fund manager and Vadera, who has a reputation for being a fearsome negotiator.
The suggestion to shift the Pru out of the UK has proved controversial.
David Buik, veteran City analyst, said: ‘I agree entirely with the sentiment that many shareholders are in the UK, and it would be a huge shame to see a company which provides jobs and pays tax in Britain to move abroad.’
Analysts at Jefferies disagreed that the company should be split up.
Jefferies’ Philip Kett said: ‘We suspect that US cash flows are more critical than may at first appear, providing cash flow to reinvest in Asia.’
JP Morgan analysts said that though most investors they had spoken to were in favour of the divide, it was unclear how Prudential might offload its £10billion US arm.
Prudential already has a much-reduced presence in the UK, after hiving off its European arm into M&G last year.