By Jo Best, 3 August 2004 11:10
NEWS Prudential has announced that it won't be selling off online banking subsidiary Egg after months of negotiations - because it could not find a buyer willing to shell out enough cash.
Prudential announced back in January that it was looking to offload its 79 per cent stake in the online bank to expand its Asian presence. Several big name financial institutions, including MBNA and Capital One, were rumoured to fancy signing on the dotted line.
The asking price for the internet bank was thought to be between £1.4bn and £1.6bn.
Egg had been struggling with its French arm, which wasn't matching the performance of the operations. Last month, the bank closed its doors in France but the move still failed to stir enthusiasm in the City for a buyout.
The news of the non-sale raised eyebrows instead of share prices on the stock market, which saw Egg's shares tumbled over 20 per cent after the announcement, with the Pru's shares also falling - but by just three per cent.
Jonathan Bloomer, Prudential CEO said in a statement: "We had an obligation to explore all the options for the business following the approaches we receivedÂ… we have concluded shareholders' interests are best served by retaining our Egg holding." He added that the bank has "significant potential to grow in value".
In order to post a comment you need to be registered and logged in.
Log in or create your silicon.com account below