Egg shares plummet after Prudential abandons sale

Egg shares plummet after Prudential abandons sale

Shares in Egg have fallen over 20% after parent company Prudential abandoned plans to sell its 79% stake in the UK online bank.

Egg's shares droppped 32 pence (22.22%) to 122 pence in morning trading, down from an overnight close of 144 pence, after Prudential confirmed it was calling off the sale.

The auction of Egg - Britain's largest Internet bank - has been dragging on since January when UK insurer Prudential announced plans to sell its majority stake following speculation that it had received a bid from US credit card company MBNA. Since then a plethora of other companies have been rumoured to be interested in the stake, including Citibank, HSBC, Lloyds TSB, Royal Bank of Scotland and Capital One. More recently US banking group JPMorgan Chase was considering making a £1.4bn bid for the business.

The Web bank recently announced plans to shut down its loss-making unit in France in an attempt to make it more attractive to buyers.

It was reported on 19th July that Prudential chief executive Jonathan Bloomer had told advisers that if a sale was not concluded in two weeks, he would scrap the deal and keep the online bank independent. Bloomer has now told reporters that the company had not received an offer that reflected the value of the business.

In a statement, Paul Gratton, Egg's chief executive, says: "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."

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