Virus-Related Turmoil Threatens Prudential Unit's IPO Plans

Law360 (March 24, 2020, 4:37 PM EDT) -- Prudential said Tuesday market turmoil related to the coronavirus could derail plans for its U.S. subsidiary Jackson's minority initial public offering later this year.

The potential IPO, which Prudential PLC announced earlier this month, was an effort to bring third-party capital into Michigan-based Jackson National Life Insurance Co. The U.K.-based parent company said it may pivot to a different strategy in light of current market conditions.

"In light of continued turmoil in public equity markets, the board is ensuring that, alongside preparations for a minority IPO, it continues to actively evaluate other options in relation to Jackson," Prudential CEO Mike Wells said in a statement Tuesday.

Prudential signaled its interest in finding outside investment for Jackson back in August, as part of its half-year 2019 results. Earlier this month, as it announced its full-year results, the insurer said its preferred option was a minority IPO.

Ultimately, the goal is an "independent Jackson" with a more diverse product mix and a stronger capital position, Wells' statement said. The statement did not detail which alternatives are being considered, or under what conditions Jackson would proceed with the IPO.

The announcement also emphasized the importance of Prudential's strategy in Asia. The insurer in October split off its M&G Prudential European and U.K. business, leaving the rest of the group to focus on Asian, U.S. and African markets. Prudential is one of several insurers to begin pulling out of annuities markets in Europe after the imposition of stringent new capital rules.

Prudential is far from the only company to demonstrate wariness about entering the public markets as the coronavirus continues to spread. Public debuts in U.S. markets have slowed to a trickle, with even special-purpose acquisition companies — normally considered somewhat resilient to short-term market swings — starting to hold back.

"In the same way that Covid-19 is requiring us to think flexibly about how we deliver for customers, it also requires us to be flexible in how we execute our corporate strategy," Wells' statement said.

Representatives for Prudential and Jackson did not immediately respond to requests for further comment Tuesday.

Counsel information was not immediately available.

--Additional reporting by Sarah Jarvis, Tom Zanki, Najiyya Budaly and Lucia Osborne-Crowley. Editing by Janice Carter Brown.

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