MARKET REPORT: Prudential’s dismantling goes on with US arm split off

The break-up of Prudential continued as bosses confirmed the American business will be hived off and listed on New York’s stock exchange in the summer.

The 172-year-old life insurer, which famously insured more than 320 victims of the Titanic, began to focus on Asia after spinning off its UK business M&G two years ago. 

And the firm now wants to split off Jackson, its US division, as well.

The Pru said it expects the separation to take place in the second quarter – in other words, at some stage between April and June.

Break-up: Prudential began to focus on Asia after spinning off its UK business M&G two years ago. And the firm now wants to split off Jackson, its US division, as well

Jackson with then be listed in New York under the ticker ‘JXN’, with current Pru shareholders given a new set of shares in the company. 

The Pru said this route would allow it to spin off Jackson more quickly, as opposed to floating a minority stake in the business and then selling down its position over time.

It has appointed former Met Life boss Steven Kandarian to oversee the American firm’s debut as its new non-executive chairman. 

After the float, the Pru will be left with a 19.9 per cent stake in Jackson, which it will gradually sell down to raise cash to invest elsewhere.

Stock Watch – Oxford Biodynamics

Shares in Oxford Biodynamics tumbled after the biotech firm’s revenues dropped by half.

The Aim-listed company said revenues fell from about £910,000 to £460,000 in the year to September 30.

The firm claimed the drop was due to delays to some projects caused by the Covid-19 pandemic and the previous year’s figure including one-off licensing fees. 

It meant losses also widened from £3.9million to nearly £5million. Shares fell 9.5 per cent, or 7.75p, to 74p.  

‘This accelerated process would complete Prudential’s transformation into a group focused exclusively on the high-growth opportunities of Asia and Africa,’ the company told investors.

The shake-up is a victory for activists such as US hedge fund Third Point, run by Wall Street billionaire Dan Loeb, who have long agitated for change.

But Pru shares tumbled 7.8 per cent, or 105p, to 1236p as the firm also revealed it planned to raise as much as £2.2billion by issuing new shares.

It plans to do this in Hong Kong, London, or both and said the aim will be to attract Asian investors and bolster its balance sheet. 

However, the slide in shares helped to drag down the FTSE 100, which has struggled to make gains this week.

The blue-chip index fell 0.6 per cent, or 41.22 points, to 6526.15, led by the Pru and education publisher Pearson, which was down 7.8 per cent, or 67.8p, to 800p.

Pearson has been targeted by short sellers, who are betting its stock will fall, with around 8.5 per cent of its shares currently on loan.

Drugs giant Astrazeneca also fell 1.7 per cent, or 130p, to 7649p as the firm’s row with the EU over vaccine supplies continued.

It was a better day for mining group Anglo American, however, which rose 3.9 per cent, or 91.5p, to 2446p after reporting that production had returned to 95 per cent of 2019 levels. 

Last year the firm saw its operations hit by the coronavirus crisis, but yesterday boss Mark Cutifani said it had recovered in the second half.

In a fourth quarter update, Anglo said it was boosted by strong performance at its copper mine in Los Bronces, Chile, and its iron ore mine in Minas-Rio, Brazil. 

However, the owner of De Beers trimmed its production forecasts for diamonds this year, saying it now expects to produce between 32m and 34m carats rather than between 33m and 35m, blaming operational problems.

And despite a tumble in global demand for diamonds and jewellery during the pandemic, Anglo said there had since been ‘positive trends’. It produced 18 per cent fewer diamonds in 2020, when compared to 2019.

After the announcement, shares in rival Glencore also rose, by 4.6 per cent, or 10.9p, to 248.7p.

The FTSE 250 index of mid-sized companies was also in positive territory, rising 0.4 per cent, or 89.9 points, to 20,368.25.

Top risers included Hochschild Mining, up 8.5 per cent, or 16.3p, to 209.2p and travel firms Tui (7.2 per cent, or 24.3p, to 360.3p), Easyjet (4.6 per cent, or 32.6p, to 746.6p)and Wizz Air (4.7 per cent, or 198p, 4402p).

This post first appeared on Dailymail.co.uk