Prudential incurs investors' wrath as Thiam heads north

Insurance boss to discuss plans to buy Asian arm of AIG with Scottish fund managers
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The Independent Online

Prudential's chief executive, Tidjane Thiam, will head to Edinburgh tomorrow to meet fund managers in the Scottish capital after botching a number of meetings with investors in London last week.

Mr Thiam is believed to have now met around 30 institutional investors in the company in an effort to persuade them of the merits of the $35.5bn (£23bn) deal to buy the Asian assets of American Insurance Group.

Instead, Mr Thiam infuriated a number of investors, many of whom own large stakes in Prudential, with a series of meetings characterised as "too short", "unhelpful" and "sketchy".

One senior fund manager, whose firm owns a stake in Prudential of more than 1 per cent, said: "He clearly didn't want to be there. He was irritable and unhelpful."

Another said: "The whole thing sucked. I knew as much about the deal when the meeting started as when in finished – rather quickly I might add. He was, in effect, saying 'trust me', but that's simply not good enough on a deal like this.

"We need to know more. A lot of other fund managers feel the same way as I do about this deal."

Fund managers in London with smaller stakes in the insurer have also vented their anger at what one manager described as the "utter arrogance of the Pru."

The manager said: "I understand that we have our place but we haven't got a clue what's really going on or when we will get an audience with the Great Tidjane. "He is asking us to support a deal at a hefty price."

Mr Tidjane, who joined Prudential from rival insurer Aviva last September, will try to persuade Edinburgh's fund managers, including the likes of Standard Life Investment, Scottish Widows and other institutional heavyweights, to back the $20bn rights issue which is needed to support the deal.

Mr Tidjane had to cancel meetings planned with investors in Scotland on Friday because of confusion over an existing lunch engagement withSingapore's former prime minister Lee Kuan Yew. Other business leaders, including WPP's Martin Sorrell, attended the meeting too.

Sources close to Prudential sought to play down the fund managers' concerns at the weekend: "There were problems at the start of the week with timings but the overwhelming response from investors has been positive. With regards smaller investors, we are never going to please everyone I'm afraid. "

Prudential's chairman, Harvey McGrath, said on Friday that he had been encouraged by the City's response to the proposed deal.

"I have been in a number of these meetings," said Mr McGrath. "I have seen first hand the enthusiasm for the proposition once the investors have been taken through the presentation by the team."