Shares of Prudential plc fell as much as 11% on Thursday, as the U.K.-listed insurer said it was going to raise as much as $3 billion in equity and split off its U.S. arm in a demerger rather than an initial public offering.
said it would be faster to split off Jackson National Life with a demerger onto the New York Stock Exchange, rather than an IPO. The demerger is planned for the second quarter, and Prudential said it would retain a 20% stake that it will gradually sell off.
Prudential also said it would raise between $2.5 billion and $3 billion through a sale of stock in Hong Kong, London, or both.
After the spinoff of Jackson National, Prudential said it would be entirely focused on Asia and Africa. “These regions offer attractive demographic characteristics and have generally low levels of penetration of insurance products,” the insurer said.
The broader FTSE 100
fell 0.7%, weighed down by the decline in risk sentiment due to hedge funds getting caught out on their short positions in the U.S.
The U.K. market hasn’t seen the same boost for heavily shorted securities that the U.S. market has, though education-software publisher Pearson’s
shares fell 7% after the 14% run-up on Wednesday.
Alcoholic-beverage conglomerate Diageo
rose 3%, helped by reporting a 1% rise in organic sales during its fiscal first half. Diageo also lifted its interim dividend by 2% and said it expects sequential improvement in the second half.