Prudential Chiefs To Face Angry Investors
Posted on June 5th, 2010
> Top bosses at insurer Prudential will face angry investors today less than a week after the collapse of its bid for the Asian arm of bailed-out US giant AIG.
The firm’s annual meeting in central London is set to be a stormy affair after shareholders were left with a £450 million bill from the collapse of the venture.
Chief executive Tidjane Thiam – who masterminded the failed bid – and chairman Harvey McGrath have so far faced down calls to resign and say they have the support of major shareholders.
But both men are likely to face calls to quit after the Pru’s failure to land AIA – delivering a major blow to plans to shift the group’s focus towards Asia, with the region providing 60% of the combined group’s new business profits.
Shareholders baulked at the heavy 35.5 billion US dollar (£24.5 billion) cost of the deal – to be funded by a £14.5 billion fundraising from investors – and demanded Mr Thiam renegotiate the price.
The deal collapsed early last week when the second 30.4 billion dollar (£21 billion) offer tabled by Prudential was rejected by the AIG board.
Despite weekend speculation, the insurer will not be resurrecting the deal.
Although neither Mr Thiam or Mr McGrath are up for re-election at the meeting, both will come under pressure to outline a new strategy in the wake of the failed bid – as well as explaining what went wrong.
The deal was originally announced in March but alongside the price worries, the timetable for the rights issue was delayed when the Financial Services Authority raised concerns over the capital position of the enlarged group.
Mr Thiam also came under fire for accepting a non-executive role at French bank Societe Generale after the AIA deal was announced, but quickly withdrew after criticism from investors.
June 7, 2010
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Tags: Angry Investors, Face Angry, Face Angry Investors, Investors
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