French losses have dragged Egg into the red

Discussions with a potential buyer were "at a preliminary stage", Prudential said, refusing to give details.

Investors have speculated that a large US credit card firm could be interested in Egg, which has 3 million UK clients, and which the market values at �1.4bn.

Egg has been in and out of profit, but an expensive European expansion has weighed on its balance sheet.

Egg's shares ended up 44 pence at 169p on Wednesday, while Prudential shares climbed 20.75p, or 4.4%, to 490.5p.

Un oeuf, already

The main source of Egg's current woes is France, where the company bought an online bank in 2002.

Take-up of Egg's French credit card has been far poorer than expected, and the venture chalked up a �70m loss in the first nine months of 2003.

Egg had hoped to find a partner for, or even sell, its French business by the end of last year, but has so far failed to reach a decision.

Prudential has previously said it was planning to sell its 79% stake in Egg, and there were rumours that a �2bn price tag was floated last October.