Aviva: we're takeover-proof

Boss fights back after £17bn Pru bid is dropped

Richard Harvey, the embattled chief executive of Aviva, has issued a challenge to the world's deal-makers by saying the giant insurer is virtually immune from takeover.

Speaking after he dropped the group's £17bn attempt to take over its main rival, Prudential, Mr Harvey dismissed suggestions that the failed bid made it vulnerable to a takeover.

"Who in the UK would be able to buy us?" he said of his £20bn Aviva, whose brands include Norwich Union and the AA.

"It is impossible to consider that the relatively few insurers worldwide - maybe two or three - would be able to mount a bid. That sort of thing does not work."

Analysts believe that ING of the Netherlands or Axa of France may be looking at either Aviva or the Pru following this minor bid battle. However, Mr Harvey dismissed this, saying that cross-border hostile offers are rare in insurance.

Within the Pru, the feeling is that the ending of Aviva's bid does not mean the company is safe from an offer. The likes of Manulife in Canada and The Hartford in the US are believed to be keen to move into the UK market and could be tempted by the Pru.

However, Mark Tucker, who only took over as the Pru's chief executive a year ago, has argued that the group has a strong future as an independent company, with good growth coming from its Asian business in particular.

Mr Harvey said that the Pru bid had been a one-off deal and Aviva would not be attempting anything similar.

"The Pru was a unique fit and would have been complementary across all areas," said Mr Harvey. He suggested that the all-share offer, rejected by the Pru, would have delivered value for investors in both groups.

Aviva was forced into detailing its offer last week when news of its approach to the Pru leaked. The Pru rejected the bid and, after hinting that he might increase it and then backtracking, Mr Harvey dropped the offer on Friday afternoon.

A leading shareholder in both companies was irked by Aviva's approach. "If they really thought this was a unique opportunity, they should have forced the case and put pressure on the Pru to negotiate a deal," he said.

Other shareholders said the bid was a distraction and were glad it ended quickly. One insurance analyst said any offer could have led to a Competition Commission investigation as the combined group would have had market shares of more than 50 per cent in three areas: immediate annuities, with-profits policies and single-premium protection.