Prudential 'is in running' to buy Equitable fund

The Prudential is reportedly among bidders for the £7 billion with-profits fund of troubled mutual Equitable Life.

Reports say the Pru has yet to decide whether it will bid for all or parts of the fund. Equitable has sent memoranda to interested parties, and begun to hold talks with potential bidders.

Equitable, which almost collapsed in 2000, transferred its fixed pensions to Canada Life and £1.7 billion of with-profits annuities to the Pru in a deal last December.

Chief executive Charles Thomson came under fire from policyholders last month after earning more than £1 million last year despite a near-30% drop in the size of the mutual.

The Pru, with high hopes for its Asian business, reiterated yesterday that it would be open to strategic investment by foreign firms such as China's Ping An Insurance, itself part-owned by HSBC. However, it refused to comment on specific negotiations and said it was not under pressure to raise capital.

"We look at strategic options from time to time...through the lens of shareholder value," said chairman Sir David Clementi.