19 Oct 2004

Proposed one for six Rights Issue at 308 pence per new share to qualifying shareholders

Summary

Issue and timing

• Net proceeds of £1 billion
• One new share per six existing shares at 308 pence per share
• Represents a 29.5 per cent discount to theoretical ex rights price (TERP) and a 32.8 per cent discount to the closing price on 18 October 2004
• Proposed issue of 337.2 million new shares represents approximately 16.7 per cent of issued share capital
• Fully underwritten by UBS Investment Bank, Cazenove and Goldman Sachs International
• Current dividend policy to be maintained
• No EGM required
• Nil paid trading period expected to commence on 20 October 2004
• Dealings in new shares, fully paid expected to commence on 11 November 2004

Rationale

• Increases Prudential’s ability to seize opportunities for UK sales growth created by depolarisation, clearer government policy on savings products and increased awareness of the need to save.
• Strengthens Prudential’s regulatory capital position in anticipation of the EU Financial Groups Directive effective from 1 January 2005.

Commenting, Jonathan Bloomer, Group Chief Executive of Prudential plc, said:

“This rights issue is about raising capital to grow the UK business. In recent years we have transformed our business in the UK and we are now well positioned to take advantage of the growth opportunities in the market.

As you will have seen from the third quarter new business figures we have announced today, sales are gaining momentum and we now have a much more positive view on future prospects for the UK. It is with this in mind that we have decided to launch our £1 billion rights issue. Aside from the UK growth opportunities, we want to ensure we remain appropriately capitalised going into a new regulatory regime.”

Additional information follows and forms part of this announcement.

Notes to editors:

1. There will be a conference call today at 7.30 a.m. for wire services hosted by Jonathan Bloomer, Group Chief Executive and Philip Broadley, Group Finance Director. The dial-in telephone number is +44 (0) 20 8288 4530. Callers should quote Prudential for access to the call.

2. A presentation to analysts and investors will take place today at 9.30 a.m. at Prudential plc’s offices at Laurence Pountney Hill, London EC4R 0HH. Registration will commence from 8.30 a.m.. This presentation will be webcast live and will be accessible from our website (www.prudential.co.uk). The slides will be published on our website from 9.30 a.m. this morning and an audio recording of the presentation will be available on the website from 2.30 p.m. this afternoon.

3. A press conference will take place this morning at 11.30 a.m. at Prudential plc’s offices at Laurence Pountney Hill, London EC4R 0HH. If journalists wish to attend please call the Group Press Office in advance on +44 (0) 20 7548 3712.

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