Prudential is planning a sale or partial float of its US insurance business as it faces pressure from an activist hedge fund to focus on Asia.
The London-based insurance giant is set to lay out plans to sell a stake in US firm Jackson, which it has owned since 1986, the Sunday Times reported.
The potential sale comes just weeks after hedge fund manager Dan Loeb called for the breakup of the Pru after taking a near $2bn (£1.5bn) stake.
Loeb’s New-York based investment firm Third Point has built a five per cent stake in the insurance firm and is now pushing for it to separate its Asian and US operations.
In a letter to the board last month, Third Point said separating the company’s Asian and US operations would “increase investment in both businesses, optimise growth, and drive higher valuation.”
Jackson – which is based in Michigan and has four million US customers – could be worth between $6bn and $10bn.
The move would likely please Loeb, whose fund said two weeks ago that “Prudential Corporation Asia and Jackson National Life have distinct strengths but share no discernible benefit from being operated under the same corporate umbrella”.
Loeb has also advocated shuttering Prudential’s London headquarters to lower office costs, which it estimates to be nearly £200m per year.
However, the FTSE 100 firm is opposed to closing its head office as the bulk of its shareholders are based in Britain, the Sunday Times said.
Prudential declined to comment.