Prudential plc Announces Share Repurchase Programme to Offset Scrip Dividend Dilution

Prudential plc has announced the initiation of a new share repurchase programme, a move designed to neutralise the dilutive effect of shares issued as part of its scrip dividend alternatives for the 2024 second interim dividend and the 2025 first interim dividend. This action is likely to interest investors, as it could have implications for both the company’s earnings per share (EPS) and its share price.

Key Highlights of the Repurchase Programme

• Repurchase Size and Purpose: Prudential will repurchase approximately 2,200,000 ordinary shares (precisely 2,197,669 shares), equivalent to around 0.09% of the company’s issued share capital. The primary aim is to offset dilution from shares issued under the scrip dividend alternative for the most recent dividends.
• Financial Details: The programme will allocate a maximum of GBP 31 million (approximately HKD 322.2 million or USD 41.4 million, based on the exchange rates as of 12 December 2025 HKT) for the share buybacks.
• Timeline: The repurchase will take place between 15 December 2025 and 19 December 2025.
• Execution Partner: The company has partnered with Merrill Lynch International (MLI) (acting as riskless principal) to execute the share purchases on the London Stock Exchange and other trading venues such as Turquoise Global Holdings Limited, CHI-X, and BATS.
• Cancellation of Shares: All repurchased shares will be cancelled, permanently reducing the company’s share capital.
• Regulatory Compliance: The programme will be conducted in line with the UK Listing Rules, Hong Kong Listing Rules, the Hong Kong Code on Share Buy-backs, and relevant Market Abuse Regulation requirements.
• No Impact on ADRs: The repurchase will not involve the company’s American Depositary Receipts (ADRs), nor will any shares be bought back on the Hong Kong Stock Exchange.
• Ongoing Buyback Activities: This programme will run concurrently with the final tranche of the company’s previously announced US\$2 billion share buyback programme (the current tranche being US\$500 million, also executed by MLI).
• Future Repurchases: Prudential indicated intentions for further buybacks to neutralise any future dilution from scrip dividends or employee/agent share schemes.

Implications for Shareholders

• Dilution Neutralisation: Shareholders who opted for scrip dividends will see their interests protected, as the company’s repurchase and cancellation of shares will maintain EPS and limit dilution.
• Potential EPS Enhancement: The programme, though small in size, is expected to marginally enhance earnings per share, which could be supportive for the share price.
• Signalling Effect: The board’s decision to deploy capital on buybacks signals confidence in the company’s underlying financial health and its ability to generate shareholder value.
• Limited Scale but Positive Direction: Although the buyback covers only a small fraction of the share base, it reassures investors of Prudential’s commitment to efficient capital management and shareholder returns.
• Regulatory Safeguards: The programme is subject to strict regulatory frameworks, which should provide investors with comfort about transparency and compliance.

Other Relevant Details

• Company Background: Prudential plc offers life and health insurance and asset management services in Greater China, ASEAN, India, and Africa. Its mission is to be the most trusted partner and protector for this generation and generations to come.
• Listings: The company is listed on the Hong Kong (2378), London (PRU), Singapore (K6S), and New York (PUK) stock exchanges.
• No Link to US-based Prudential: Prudential plc is not affiliated with Prudential Financial, Inc. (USA) or The Prudential Assurance Company Limited (UK subsidiary of M&G plc).

Conclusion and Investor Takeaway

This share repurchase programme, while modest in scale, is noteworthy for shareholders. It demonstrates Prudential’s active management of capital and commitment to offsetting dilution from recent scrip dividend offerings. The company’s ongoing buyback activities and stated plans for future repurchases may also provide further support to the share price, especially given the positive effect on EPS. Investors should monitor further announcements regarding the execution of this programme and any future buybacks.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own financial advisors before making investment decisions. While all information is derived from Prudential plc’s official regulatory announcements, future performance and share price movements are subject to market risks and uncertainties.

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