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.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power