Prudential PLC, the United Kingdom’s second-biggest insurer, turned down an offer for its Egg Internet banking unit.
The approach “was speculative and conditional and not in our shareholders’ interests to pursue,” Jon Bunn, a Prudential spokesman, said in a press release issued Sunday. The London company did not say who had made the offer, and Mr. Bunn would not elaborate during a phone interview.
The Sunday Times of London reported that Citigroup Inc. had offered $1.9 billion for Egg, to expand its U.K. retail banking business, though the paper did not say where it got the information.
The offer came less than a year after Prudential took full control of Egg in a deal that valued the online banking unit at about $1.9 billion. Mark Tucker, Prudential’s chief executive, is cutting costs and hopes to save $293 million a year by integrating Egg with his company’s U.K. life insurance unit.
Adrian Russell, a spokesman for Citigroup, would not comment on the report.
Egg, which was valued at $2.5 billion when it went public in June 2000 near the height of the Internet boom, has struggled to make money for Prudential. The unit lost about $76 million in the first half, and in October, Prudential forecast a similar loss for the second half.
In February, Prudential purchased the 22% of Egg it did not already own. The insurer abandoned a bid to sell Egg in 2004 after receiving offers from Royal Bank of Scotland Group PLC and MBNA Corp., now part of Bank of America Corp.
Egg has about 3.5 million customers.
Bruno Paulson, an analyst in London for AllianceBernstein Holding LP’s Sanford C. Bernstein & Co. LLC, who rates Prudential’s stock “market perform,” said that “it would be embarrassing for management to make a U-turn now, having stressed the savings from integrating Egg with the rest of the U.K. business.”
