LONDON (Reuters) - Insurer Prudential has raised the tempo of the auction
for its stake in Britain's largest Internet bank Egg, saying it has received
further bid interest.

"Prudential has now begun a process that will give a number of potential
purchasers an opportunity to make a proposal. This may or may not lead to a
transaction," it said in a statement on Monday.

Analysts and bankers have touted Royal Bank of Scotland RBS.L , HSBC HSBA.L
, U.S. credit card giant MBNA and Lloyds TSB LLOY.L as possible bidders.

All of the companies have declined to comment.

Earlier this month, Prudential PRU.L said it was in talks to sell its 79
percent holding in Egg, triggering a 58 percent surge in the loss-making
bank's shares.

A spokesman for Prudential said a potential bidder had initially come
forward about buying Egg after Prudential said in October it was looking for
a strategic partner for the bank's faltering French operations.

"As those preliminary discussions continued, other parties came in. There
are a number of parties we are now going to be talking to," said the
spokesman, declining to comment on how many or which companies had expressed
an interest in Egg.

A spokeswoman for Egg EGG.L declined to comment.

Analysts and dealers have said a potential bidder could pay in the region of
180 to 200 pence a share for Egg, valuing the company at between 1.5 billion
and 1.6 billion pounds and giving Prudential a near 1.3 billion pound cash
injection.

A deal announcement is not expected for some weeks.

Shares in Egg were down 1.77 percent at 185-1/4 pence in morning trade,
valuing the group at around 1.5 billion pounds. The shares hit a peak of
197-2/3p last week but have retraced some of those gains over the past three
days.

Prudential, Britain's second-largest insurer, was trading down 1.61 percent
at 490-1/4p in a flat general market.

EGG UNDER THE HAMMER

Of the British banks, BNP Paribas analyst Hugh Pye said Egg would fit
particularly well with Royal Bank of Scotland's operations.

"I don't think it would be of interest to Barclays, HBOS and HSBC; it
doesn't fit into their retail strategy.

"I think the concept fits more comfortably with Royal Bank. It has tended to
be much keener on a multi-brand strategy, and bringing in another credit
card business would not be a problem."

Egg, which has over three million UK customers and five percent of the UK
credit card market, remains in the red because of its struggling French
business.

Profits at Egg's main British operation more than doubled to 20 million
pounds in the three-months to end-September, while the French business lost
20.8 million pounds in the same period.


--
Michal 'Amra' Macierzynski
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