Shareholder storm will rock Pru's boat at AGM
The beleaguered life insurer Prudential will today make a further attempt to launch a fightback following the collapse of its $35.5bn (£24.5bn) bid to take over the Asian insurer AIA.
The annual meeting of the company – which lost its shareholders £450m as a result of the deal's failure – will provide an army of small investors the chance to question its board at the Queen Elizabeth Centre in Westminster – a venue the Pru had hoped would serve as the launch-pad for the deal.
The chief executive, Tidjane Thiam, and chairman, Harvey McGrath, are likely to have to answer for their actions at the event, which could prove to be a stormy affair.
Questions have already been raised in the City over the long-term future at the company of the two men, although larger institutions have indicated that they will be given a "stay of execution" to steady the ship after the upheavals of the past months.
Even so, the company created fresh controversy at the end of last week after Mr McGrath referred to those who have called for heads to roll as "outliers". Several shareholders are understood to have demanded meetings with the company to discuss its conducted.
Prudential insists its board remains behind both Mr McGrath and Mr Thiam, while Mr McGrath has said there will be no resignations.
Robin Geffen, the chief executive of fund manager Neptune, which led opposition to the deal, urged small shareholders to attend and voice their unhappiness with the company's actions. "This is their chance, they will not be able to secure a meeting with the company," said Mr Geffen, adding that he was "disappointed but not surprised" by Mr McGrath's comments.
"They have been high-handed and arrogant from the word go," he said. "At the end of the day, somebody needs to be accountable for what has happened. I want to stress that this is my view and my view alone but the position of the chief executive is untenable and I want to know what the non-executive directors are doing here."
Mr Geffen said he had been trying to secure a meeting with Prudential, but the company had failed to respond to his requests. He will not attend the AGM, because he said it would be "inappropriate" for an institution such as Neptune to appear at a forum designed to give small, individual shareholders the chance to put points to the directors of the company.
Prudential killed off the deal after trying to renegotiate the sum it was prepared to pay AIA's state-owned parent company American International Group, after it became clear that shareholders would not accept the $35.5bn price at a time of tumbling world markets.
But AIG turned down a revised $30.3bn cash and shares offer, which required Prudential to pay a break fee of £150m. The Pru has also been forced to pay up £300m to a battery of lawyers, bankers and public relations consultants despite intense criticism of the way the communication of the deal was handled.
While there has been talk that the insurer could now be a candidate for a break-up bid, sources close to it have played this down, noting that capital generated by the UK arm – a target for Clive Cowdery's Resolution Group – helps fuel growth at Prudential's existing Asian business. That operation is still seen as the jewel in the Pru's crown.
Shares in the life insurer closed 9.5p lower at 556p last week.
- 1 Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
- 2 James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
- 3 Reading Festival 2014: Tesco branch replaces salad and potatoes for Jagermesiter and vodka
- 4 Here’s the damning letter Robin Williams wrote to his Mrs Doubtfire co-star's principal after they expelled her
- 5 Ferguson protests: 90-year-old Holocaust survivor Hedy Epstein ‘arrested’ by police during St Louis demonstrations
Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
Michael Brown shooting: Ferguson police shoot and kill second young black man
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Ferguson: In the heartlands of America, a descent into madness
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
iJobs Money & Business
£475 - £550 per day + competitive: Orgtel: Senior Technical Accountant-Insuran...
£200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...
£25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...
£600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...