Issue of Equity,etc
Prudential PLC
25 May 2000
START OF EGG IPO MARKETING PROCESS
Prudential plc today announced the start of the marketing for the IPO of a
minority stake in Egg plc which, subject to market conditions, is scheduled
to take place in June.
Highlights of the IPO include:
Price range set at 130-175 pence per share, which values the Egg group
between approximately £1.1bn and £1.4bn
Offering of at least 18% of Egg's share capital
Retail offering to customers of Egg and Prudential Banking, limited to
eligible existing customers as at midnight on 22 February 2000, with an
on-line application process
Offering to UK eligible employees of the Prudential group, including eligible
employees of the Egg group
Offering to institutional investors in the United Kingdom and elsewhere
The Global Offer will comprise the issue of new shares by Egg plc (through
which Egg is expected to raise approximately £150 million net) as well as the
sale of some existing Egg plc shares held by Prudential plc in order to meet
London Stock Exchange liquidity requirements.
The retail offer (the Egg Share Offer) to eligible customers will have an on-
line application and settlement process. A mini-prospectus can be viewed
on-line on the web site http://share.egg.com from 26 May 2000. Eligible
customers will be able to view the mini-prospectus and complete and submit
the application form on this site. Customers have been sent a letter
detailing eligibility criteria and explaining how to access the web site if
they do not already use the Internet.
Following the recent appointments of Roberto Mendoza and Richard Delbridge to
the Egg board, the remaining non-executive directors have been confirmed.
They are Jonathan Bloomer and Derek Higgs as non-executive directors
nominated by Prudential, and Leslie Priestley and David Smilow as independent
non-executive directors.
Commenting on the announcement, Jonathan Bloomer, Group Chief Executive of
Prudential plc, said:
'I am delighted that Egg has started the marketing for the IPO. Egg is a
substantial business with a proven track record and with the ongoing backing
of Prudential will continue to build on its strong market position.'
Mike Harris, Chief Executive of Egg plc, said:
'Egg is now moving into an exciting new phase of our growth and development.
Flotation is a strategic move that will enable us to maximise the potential
for growth in the business by giving us the opportunity to develop the
business in the UK as well as internationally and will help us retain and
incentivise our people.'
An analysts' meeting will take place at 9.30 am today at Laurence Pountney
Hill, London.
For further information please contact:
Media
Jeremy Reynolds 020 7548 3721
Prudential plc
Advisers to Egg
Jonathan Glass
Brunswick Group 020 7404 5959
John Rafter
Goldman Sachs International 020 7774 1000
Analyst
Carys Walshe 020 7548 3823
Prudential plc
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.
Goldman Sachs International is acting as sponsor and financial adviser to
Egg plc and financial adviser Prudential plc and no one else in connection
with the offering and will not be responsible to any other person for
providing the protections afforded to customers of Goldman Sachs
International or for providing advice in relation to the offering.
No offer or invitation to acquire shares in Egg is being made by or in
connection with this announcement. Any such offer will be made solely by
means of the prospectus to be published by Egg plc and any acquisition of
shares should be made solely on the basis of the information contained in the
prospectus. The value of shares can go down as well as up. Persons needing
advice should consult a professional adviser.
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 Internet provider of
banking products. It is also a provider of on-line intermediation services
and is developing these further. It currently offers customers Egg branded
deposit accounts, credit cards, personal loans and mortgages, 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.
Currently, 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 for 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. As at 30 April 2000 Egg had over 1 million
customers*. As at 31 March 2000, Egg employed over 1,700 full time
equivalent, permanent staff.
Based on its current business plan, Egg intends to launch the following
products and services over the next twelve months:
a current account as a further step in the integrated banking business
model
the expansion of Egg Invest to include share dealing
the upgrading of Egg Shop to enhance functionality, expand the search
engine and increase the number of retailers available
the launch of Egg Insure, a general insurance supermarket
offering all Egg customers an Egg Wallet as a payment mechanism and
to provide a quick means of transacting over the Internet
a mortgage intermediation service to provide customers with
attractive products from prominent mortgage suppliers in the UK market
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 Financial Services Authority, 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.
The Global Offer
Egg plc intends to raise £150m net of expenses in the global offering.
Prudential plc, the sole shareholder, is selling existing shares in order to
have a sufficient number of shares in public hands to satisfy London Stock
Exchange liquidity requirements.
The Global Offer will be open to institutional investors in the United
Kingdom and elsewhere. It will also be available to existing eligible Egg
and Prudential Banking customers as at midnight on 22 February 2000 and
to UK employees of Prudential and Egg subject to eligibility.
Because of legal restrictions, any share offering by Egg plc or share sale by
Prudential plc to its eligible customers and employees will only be open to
individuals resident in the United Kingdom, Jersey or the Isle of Man, who are
over 18 years of age (20 years in Jersey).
Application has been made to the UK Listing Authority for ordinary shares of
Egg plc to be admitted to the Official List maintained by the UK Listing
Authority and to be traded on the London Stock Exchange.
Egg Share Offer
Eligible customers of Egg and Prudential Banking in the United Kingdom,
Jersey and the Isle of Man, will be able to participate in the offering. The
application process will be fully on-line. Eligible customers will be able
to access the mini-prospectus and make an application via a specially
designed web page (http://share.egg.com) from 26 May 2000. Egg and
Prudential Banking customers were sent a letter in the middle of May with
details of eligibility and advice on how to access the Internet if they
were not already Internet customers.
As part of Egg's long-term strategy to become the leading online business in
the financial services sector, the application and settlement process for
customers will be fully on-line for the first time in UK. Undertaking an on-
line offer is consistent with the manner in which the majority of customers
usually access Egg's products and services.
The customer offer closes at 11.59pm on 8 June 2000, when all on-line
application forms from customers must have been submitted and confirmed by
e-mail. Customers will be sent notification of allocations by e-mail
following pricing and allocation which we expect to occur shortly after the
closing of the customer offer.
Applications can only be made for amounts of £200, £500 or £1,000 worth of
shares to be bought at the offer price. Prudential reserves the right to
manage the allocation per customer, with a random ballot if appropriate.
Customers will pay for their final allocation of shares by debit card, only
after their allocation has been determined.
Employee Offer
UK employees of the Prudential group, including employees of the Egg group,
will be offered the opportunity to apply to purchase shares. Employees must
be resident in the United Kingdom, Jersey or the Isle of Man and over the age
of 18 years (20 years in Jersey).
Applications can only be made for amounts of £200, £500 or £1,000 worth of
shares, to be bought at the offer price. Prudential reserves the right to
limit the allocation per employee.
In addition, eligible employees of the Egg group will be entitled to receive
£100 of free ordinary shares in Egg plc and options to purchase, at a later
date, ordinary shares in Egg plc worth £900 at the offer price.
Institutional offering
Institutional investors in the United Kingdom and elsewhere can apply for
ordinary shares at the offer price.
International marketing for institutional investors is due to start on 25 May
2000 covering the UK and elsewhere.
Board membership
The existing executive directors of Egg plc 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 are Roberto Mendoza, 54,
as Chairman, previously with JP Morgan, Jonathan Bloomer, 46, Group Chief
Executive, Prudential plc and Derek Higgs, 56, Director of Prudential plc.
The independent non-executive directors are Richard Delbridge, 57, who was
previously Group Chief Financial Officer of NatWest, Leslie Priestley, 66,
who is a current director of Prudential Banking plc, and David Smilow, 38,
previously Chairman of TeleBanc Financial Corporation.
The appointment of new directors is subject to approval from the Financial
Services Authority.
On 1 January 2001, a new management structure will be introduced to the Egg
group to give the Egg senior executives the opportunity to focus on
developing a growing business as well as maintaining a lead 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 maximise shareholder value. Paul Gratton will become Chief Executive
Officer and will be responsible for delivering the business plan across the
Egg group.
The syndicate
The syndicate for the Global Offer comprises:
Goldman Sachs International global co-ordinator, lead manager and
bookrunner
Cazenove & Co. co-lead manager
Morgan Stanley Dean Witter co-lead manager
UBS Warburg co-lead manager
Goldman Sachs International, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, has approved this document solely
for the purposes of paragraph 8.27 of the Listing Rules of the UK Listing
Authority.
Copies of the prospectus are available for collection from our registered
office at 142 Holborn Bars, London EC1N 2NH from 25 May 2000.
*Customers include an individual who holds an Egg product (excluding
Prudential branded products). Also treated as customers are joint holders of
a deposit account, primary and secondary holders of the Egg card and those
customers whose applications have been accepted in principle and who have been
allocated a credit limit but for whom the application process has not been
completed. Not included as customers are individuals who transact on Egg
Shop, individuals who use out ISP and customers who have died.
Not for distribution or release into the United States, Canada or Japan or to
U.S. persons
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