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Pru to go ahead with Egg flotation

Prudential is pressing ahead with its plans to float internet banking

operation Egg next month despite recent falls in technology stocks.

The Pru admits it had second thoughts about the flotation after continuing

volatility in the tech markets but finally decided to go ahead last week.

However, the decision has cost Pru billions on paper.

The price range is to be set at 130-175p per share, which will value the

company at between £1.1bn and £1.4bn. Before the technology fallout, the

company was estimated to be worth £4bn.

Pru will be offering at least 18 per cent of Egg&#39s share capital to

customers who were members of Egg and Pru banking services before February

22 as well as to employees and institutional investors.

Egg set up its banking service in October 1998 and its fund supermarket in

March this year.

Its supermarket is tailored for direct transactions by consumers but Egg

could follow in the footsteps of Fidelity&#39s fund supermarket and extend the

service to IFAs.

A Pru spokesman says: “We never said we were not going ahead with the

float. That was just pure speculation by the press. We were look- ing very

closely at the conditions of the market and we have decided that this is

definitely the right time for Egg&#39s business.”

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