Realizing that you're stuck in an "addition by subtraction" situation is a humbling one for management, but I'll give credit to Prudential plc (PUK) management for not stubbornly sticking to their guns on the idea that the market undervalues the potential of the U.S. Jackson National business. Instead, management is looking to IPO this business in 2021 ahead of a full divestment, and the company's Asian operations will be the surviving business.
Weak rates, a shaky stock market, and high volatility is exactly the wrong prescription for the Jackson variable annuity business, and even if today's conditions are temporary, the reality is that Prudential plc has struggled to generate value from what has generally been a decent variable annuity business. Exiting Jackson gives management a chance to generate capital that it can more profitably reinvest in its growing Asian operations and perhaps finally shrink some of the valuation discount.
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Bailing On The U.S. Now Looks Like Prudential Plc's Best Chance For Value Creation
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