View more on these topics

Prudential bosses apologise for failed AIA bid

Prudential’s chief executive Tidjane Thiam and chairman Harvey McGrath have both apologised to shareholders over the collapse of the deal to buy Asian insurer AIA.

At yesterday’s AGM, both Thiam (pictured) and McGrath defended the takeover and said they regretting being forced to pull out.

The deal for AIA broke down last week after Prudential asked for the price for AIA to be cut to £20.7bn, having originally agreed a £24.6bn deal in March. The cut was demanded after increased shareholder opposition to the deal.

Thiam told shareholders he regretted the collapse of the deal and was now faced with the task of restoring shareholder confidence.

Prudential faces costs of £450m associated with the deal, including a £152m “break fee”.

Some shareholders, including a number of high profile fund managers such as Schroders head of equities Richard Buxton and Neptune founder Robin Geffen, have called for the pair to step down on the back of the failed deal. Shareholder Anthony Watts from Northamptonshire labelled the pair “a disgrace” and called for them to “do the honourable thing”.

In a trading update published yesterday, Prudential announced group-wide sales of £1.4bn for the first five months of 2010, up 27 per cent on the same period last year. Prudential UK saw a 4 per cent increase in APE new business sales over the same period, up from £309m in 2009 to £322m this year.

Prudential’s share price fell nearly 4 per cent yesterday and continued to slide this morning, down 0.8 per cent to 529.5p by 8.30am.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Exasperated me 7th June 2010 at 6:02 pm

    Shareholders, Shareholders, Shareholders, Shareholders, Shareholders, Shareholders…

    What about the long suffering policyholders who lost they ‘inherited estate’?

    FSA legalised mugging..

  2. I am sure Clive will now be “resolute” in extending talks.

    Strategically what Thiam was after made total sense given Pru is esentially closed to new business in the UK. Tactically and politically he simply did not cover all the bases and as the shareholders are the core stakeholder in any deal of this nature It ain’t a mutual!) the policy holders have no say unless they, of course, are also shareholders

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com