03 Aug 2004

Prudential announces its intention to retain its 79% shareholding in Egg

Prudential plc announces that it is no longer in discussions regarding a possible transaction with respect to its approximately 79 per cent shareholding in Egg plc.

This completes an extensive process precipitated by expressions of interest in Egg received from a number of potential purchasers. The Board of Prudential has concluded that retention of its 79 per cent stake offers better value to its shareholders than the sale of Prudential’s interest.

Prudential supports the steps that Egg has announced separately which include:

• refocusing the business on its highly successful profitable core UK operations; and
• taking the necessary actions to close its business in France.

Egg has established an outstanding track record of growth and profitability in the UK. It is the UK’s leading on-line financial services business with a fast growing customer base currently standing at 3.5 million. It has established a unique and powerful brand and has proven ability to attract and retain profitable customers. It is well positioned for further success.

Jonathan Bloomer, Group Chief Executive of Prudential plc said: “We had an obligation to explore all the options for the business following the approaches we received. Our objective is to ensure that our shareholders benefit in full from the value inherent in Egg and we have concluded shareholders’ interests are best served by retaining our Egg holding. Egg has brought significant change to the market, with a track record of delivering innovative products and services to customers. It is a very successful business in the UK with significant potential to grow in value.”

- ENDS -

Enquiries to:

Notes to Editors

On 22 October 2003 Egg plc announced that the execution of its French business plan would take longer and require a greater level of investment than Egg was prepared to undertake on a standalone basis. At that time, Egg considered forming an alliance with a strategic partner and, to that end, entered into negotiations, which might have led to a joint venture. These conversations led to other options being presented by various parties and as a result, Prudential announced on 14 January 2004 that it was in preliminary discussions regarding a possible transaction with respect to its 79 per cent shareholding in Egg. On 26 January Prudential announced that while discussions were continuing, it had received unsolicited indications of interest from a number of parties, which may or may not have led to a transaction.

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