10 May 2000
Egg flotation timetable and board appointments
Prudential plc has today announced its intention to proceed with the flotation of a minority stake in Egg plc.
The marketing of the minority stake is expected to commence at the end of May, with pricing in early June, subject to market conditions. Egg plc intends to have its shares admitted to trading on the London Stock Exchange.
The flotation will comprise a retail offer to eligible customers, an employee offer to eligible UK employees of Prudential group and Egg group and an institutional offering to international investors. The customer offering will be limited to existing Egg and Prudential Banking customers as at midnight on 22 February 2000 (and additional eligibility criteria will apply). Customers will be able to apply for a maximum £1,000 of shares. Egg customers will receive a letter with more details in the next few days.
Full details of the flotation, including an indicative valuation range, are expected to be available during the week of 22 May 2000. The prospectus will also be made available at that time. Eligible customers will be able to view the mini-prospectus on-line, as part of the on-line application process available for the customer retail offer.
The offering will comprise the issue of new shares by Egg plc as well as the sale of existing Egg plc shares held by Prudential plc.
Egg management changes
As part of a strong board, Roberto Mendoza has been appointed non-executive Chairman of Egg plc with immediate effect. A further non-executive director appointment is Richard Delbridge.
On 1 January 2001, a new management structure will be introduced to Egg group to give the Egg senior executives the opportunity to focus on developing a growing business as well as keeping ahead in a fast moving market. Mike Harris will become Executive Vice Chairman of Egg plc and Chairman of the Egg Executive Committee, with the main responsibility for creating and sustaining the new business strategy and vision for the Egg group to maximize shareholder value. Paul Gratton will become Chief Executive Officer and will be responsible for delivering the business plan across the Egg group.
Commenting on the announcement Jonathan Bloomer, Group Chief Executive of Prudential plc, said:
"I am delighted to announce the IPO, which I believe will build on Egg’s achievements to date including their first mover advantage and maximize their growth potential. The flotation will enhance management focus and raise the profile of the business. It will provide an acquisition currency for strategic expansion and help to recruit, incentivise and retain high calibre staff. I am also delighted with the appointments of Roberto Mendoza as Chairman and Richard Delbridge to the board of Egg and the considerable expertise they both bring with them."
Mike Harris, Chief Executive of Egg plc, said:
"The flotation of Egg will be an important milestone in our strategy. We are determined to do all that we can to grow the value of Egg, consolidate its UK market position as a leading provider of banking products over the internet and develop further its on-line intermediation services. We are pleased that we can provide the opportunity for many of our customers and employees to become shareholders of Egg."
Tel: 020 7548 3823
Tel: 020 7548 3721
Tel: 020 7404 5959
Goldman Sachs International
Tel: 020 7774 1000
This announcement is not for distribution in the United States, Canada or Japan. This announcement and the information contained herein is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States, Canada or Japan. Egg securities may not be offered or sold in the United States unless they are registered under applicable law or exempt from registration. Egg does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States. No money, securities or other consideration is being solicited by this announcement or the information contained herein, and, if sent in response to this announcement or the information contained herein, will not be accepted.
Notes for Editors:
Information on Egg
Prudential launched the Egg business in October 1998 as a division of Prudential Banking plc, and Egg is now a leading provider of banking products, and also provides intermediation services, over the Internet in the United Kingdom. It currently offers customers Egg-branded deposit accounts, credit cards, personal loans and mortgages, general insurance, mutual funds and online shopping. It also provides Prudential-branded deposit accounts, mortgages and personal loans, and offers associated insurance products, which are all marketed and sold by the Prudential group.
Egg is organised along three business lines: (i) a retail banking business, (ii) an intermediation business focusing on financial products and services and (iii) a transaction portal to intermediate non-financial products and services. Egg seeks to attract Internet-enabled customers primarily into its core-banking proposition. It then encourages them to make regular visits to its website and provides them with easy access to a range of financial and non-financial goods and services. Egg had over 1 million customers as at 30April, 2000. As at 31 December, 1999, Egg employed approximately 1400 full time equivalent staff.
Based on its current business plan, Egg intends to launch the following products and services over the next twelve months:
- A current account function as a further step in the integrated banking business model.
- Egg Invest will expand to include share dealing
- Egg Shop will enhance functionality, expand the search engine and increase the number of retailers available.
- A mortgage intermediation service will be launched to provide customers with attractive products from prominent mortgage suppliers in the UK market.
However, Egg is continually reviewing opportunities as they arise and may modify the current business plan in response to such opportunities or if circumstances vary.
Egg plc is the holding company of the Egg group.Prudential Banking plc, a wholly owned subsidiary of Egg plc, is the authorised banking subsidiary, regulated by the FSA, that holds deposits, makes personal loans, grants mortgages and issues the Egg Card. Other subsidiaries within the Egg group include Egg Financial Products Limited, which operates the shopping portal and acts as the group’s internet service provider, and Egg Investments Limited, which operates Egg Invest and is regulated by the Personal Investment Authority.
It is intended in due course that the Egg plc board should consist of three executive directors, three non-executive directors with no connection to Prudential and up to three non-executive directors nominated by Prudential.
The existing executive directors of Egg are Mike Harris, 51, Chief Executive Officer, Paul Gratton, 40, Chief Operating Officer, and Stacey Cartwright, 36, Chief Financial Officer.
The non-executive directors nominated by Prudential will include Roberto Mendoza, 54, as Chairman, previously with JP Morgan, and Jonathan Bloomer, 46, Group Chief Executive of Prudential. The independent non-executive directors will include Richard Delbridge, 57, formerly a director and Chief Financial Officer of NatWest Group. Further details on the board composition will be released in the prospectus.
The appointment of new directors is subject to approval from the FSA.
The syndicate for the offering comprises:
|Goldman Sachs International
||Global Co-ordinator, Lead Manager and Bookrunner
|Cazenove & Co.
|Morgan Stanley Dean Witter
Financial information on Egg
For the year ended 31 December 1999 Egg group incurred a consolidated loss of £150m, which is analysed as follows: