Prudential could offload UK business as part of takeover

Pru is believed to be considering selling assets including the UK and US businesses to appease investors concerned over cost and funding of the group's mammoth $35.5 billion (23.2 billion) acquisition of AIA.

A sale of the two divisions is expected to be hinted at in the prospectus due to be published on Wednesday outlining the pricing and details of Pru's record-breaking $20 billion (13 billion) fundraising to finance the AIA takeover.

The decision to offload Pru UK – where the business was first founded in 1848 – would mark a complete U-turn for the group, which has fended off calls to sell-off the underperforming British business for many years.

But Pru is said to be facing shareholder rebellion against its mammoth bid for AIG's Asian arm, with shareholders baulking at the price and amount of money they are being asked to stump up for the deal.

It is thought an asset sale would be used to placate disgruntled shareholders after rumours last week that Pru's biggest shareholder, Capital Research & Management, which has a 12 per cent stake, was trying to encourage a break-up of Pru and could vote against the planned AIA takeover.

It is thought that Capital, a US investor, approached Pru's rival Aviva about joining forces in a break-up bid, although Aviva reportedly turned down the chance.

Prudential is not yet understood to be in talks with any potential bidders for the UK and US divisions, worth 4.5bn and 6.5bn respectively, although reports suggest it may signal willingness for asset sales in its prospectus on Wednesday, when it also reports back on first quarter trading.

The group said it did not comment on market rumour and speculation, adding the firm was "focused on the value of our AIA agreement".

Prudential's UK business has long been at the centre of sale speculation, as its performance has slipped in comparison to faster growing operations across Asia.

Pru reported record sales in Asia for the last three months of 2009, up 42 per cent quarter-on-quarter.

In the more competitive UK region, life and pension sales were 723m, down 24 per cent on 2008. The group's AIA takeover would mean the Asian operation becomes by far the group's biggest division.