Prudential bosses in shake-up talks BEFORE US hedge fund struck

Prudential was planning a major overhaul before US hedge fund Third Point demanded a break-up this week.

The 172-year-old life insurer, which is mainly focused on Asia, has been considering options to reduce its exposure to Jackson, its US annuities specialist.

This could include a sale to a rival or a private equity buyer, or spinning it off and listing it on the stock exchange. The most likely route would be that Prudential would list Jackson but retain a large stake.

But Prudential, which began life in London in 1848 and famously insured more than 320 victims of the Titanic, has come under siege from activist investor Third Point before it could share its vision with investors.

The hedge fund, run by billionaire Dan Loeb, has yet to meet the Pru’s board, led by chairman Paul Manduca and chief executive Mike Wells.

Third Point recently acquired a 5 per cent stake in Pru worth £1.8billion, now the fund’s biggest holding.

It believes that a break-up can double its value, and wants Jackson to list in the US and for the remaining Prudential business to move to Asia.

Both companies could retain a secondary listing in London, allowing UK shareholders to remain invested. But Loeb also wants the Pru to ditch its historic London headquarters.

The Pru no longer has any business operations in the UK after last year spinning off its European arm into M&G, now a separately listed company in the FTSE 100. 

But almost half of the shareholders are long-term UK funds, looking after the pensions and savings of British people.

Analysts point out that the City is widely seen as the insurance capital of the world and, with Pru expanding into Africa and Asia, London is a convenient midway point.

Third Point wants Pru to cut all ties with Jackson and its representatives will be in London to meet the company in the next month. 

The Pru unveils 2019 results on March 11, when it is expected to give an update on its thinking over Jackson.