Prudential to Sell Insurance Products in NatWest Branches Amid Bank of Scotland's Hostile Bid

NatWest's largest shareholder, Prudential, is set to sell its insurance products in NatWest branches, citing a separate agreement with Bank of Scotland, which is attempting to acquire NatWest in a hostile bid worth £22 billion. This move has fueled speculation that Prudential may support Bank of Scotland's bid, despite the company's claims that its decision is not influenced by the bid. Shareholders will have to decide whether to back Bank of Scotland, Royal Bank of Scotland, or support NatWest's new management by the Valentine's Day deadline.

Key Takeaways:

• Prudential, NatWest's largest shareholder with a 5% stake, will sell its insurance products through NatWest branches under a separate agreement with Bank of Scotland.
• The agreement is estimated to be worth £800m and will allow Prudential to buy NatWest Life.
• Prudential has stressed that its decision to sell insurance products through NatWest branches is completely separate from its fund managers' decisions regarding the use of its shares.
• Shareholders will face a last-ditch lobbying effort from all three banks before making a decision by the Valentine's Day deadline.
• NatWest's new management is expected to file its final defence document on Monday, outlining last year's profits and suggesting ways to return cash to shareholders.
• Mercury Asset Management, NatWest's next largest shareholder, has significant stakes in Royal Bank of Scotland, leading to speculation that it may support Royal Bank's offer.

Statistics:

• Prudential owns a 5% stake in NatWest.
• The estimated value of the agreement between Prudential and Bank of Scotland is £800m.
• The hostile bid by Bank of Scotland is worth £22 billion.
• The deadline for shareholders to make a decision is Valentine's Day.

Sources:

[1] BoS

[2] The bid announcement yesterday