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Not long now. Three years ago, Prudential chief executive officer Tidjane Thiam said that hitting 2013 targets would give the U.K.-based life insurer "options." By the end of 2012, it had hit two of the seven targets and was well on the way to the other five.
So what are these options, and should Mr. Thiam take them? The most extreme would be a breakup. The traditional argument against splitting up the Pru was that the mature U.K. business generates cash to fund Asian growth. But Asia is now self-funding and generates more cash for the group than the U.K. does, so the argument no longer holds.
With the IPO market opening up, either or both of the U.K. and U.S. businesses could potentially be floated. That would leave a group focused on Asia, where operating profits rose by a quarter last year to £1-billion ($1.53-billion). Prudential would become a more direct comparison for AIA, which it tried to buy in 2010.
But before bankers get excited, a breakup looks unlikely in the short term. After a 42-per-cent rise in the past year, its shares trade on 14 times forecast earnings. That's a premium to European rivals on 10 but a discount to AIA on 17 and China Life on 15. Given its business mix, that looks fair. It is not obvious that a breakup would release a lot more value.
Shareholders would also lose the economies of scale that derive from running the businesses together, and would run the risk that a sudden economic change could derail the project. Mr. Thiam has been burned once by trying to pull off a "transformational" deal. He is unlikely to try again in a hurry.
Still, any decision about a breakup needs to be based on more than just current prices and the risks inherent in deals. Either Prudential works as a group or it does not. Mr. Thiam is not quite making a persuasive argument that it all belongs together. If all goes well, next March he will report that Prudential hit all of its targets. He should also report a clear decision on those options.