COVID-19 uncertainty forces Prudential to consider alternative options for Jackson IPO

COVID-19 uncertainty forces Prudential to consider alternative options for Jackson IPO

Insurance giant Prudential plc has announced, that whilst it still intends to prepare for the minority IPO of its US-based business, Jackson, it will also ‘actively evaluate other options’. This is due to ‘continued turmoil in public equity markets’ due to COVID-19.  

The FTSE 100 company had announced its intention to prepare for the minority IPO on 11 March. Chair, Paul Manduca stated:

 ‘Over the past nine months, Prudential has undertaken a significant amount of work with our advisors to assess our options for introducing third party finance into Jackson. The Board has determined that the preferred route to achieve this is to seek a listing of Jackson in the US in due course, subject to market conditions.’

This comes after hedge fund and major shareholder, Third Point LLC called for the company to split its Asian and US business. The hedge fund believes that both businesses would thrive as separate entities and that by lumping the two together, the Asian business is being undervalued.

Despite market conditions forcing Prudential to consider alternative options alongside the potential IPO, it has stated that its business continuity plan has been executed smoothly, and the company remains financially resilient. Prudential reports that Jackson’s risk-based capital ratio remains at a broadly similar level as of 31 December 2019, despite market volatility. 

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