PRUDENTIAL boss Tidjane Thiam was forced into a humiliating climb-down yesterday when he rejected a board job at French bank Société Générale less than 48 hours after signalling he would accept.
Thiam bowed to the anger of shareholders who said the “arrogant” plan to take a non-executive post at SocGen would be a distraction from Prudential’s transformational takeover of American International Group’s Asian limb.
Thiam said he was flattered to have been offered the board seat, which would have begun in the middle of the insurer’s $35.5bn (£23.3bn) pursuit of American International Assurance. But he said he would not take up the four-year position at SocGen, adding: “My absolute priority is to continue to focus on delivering strong results for our shareholders.”
The U-turn caused intense embarrassment for both companies. It will also damage Thiam’s standing as a chief executive just weeks before he taps investors for a $21bn rights issue to help fund the AIA deal.
Standard & Poor’s Equity Research analyst Tony Silverman said: “It looked as if he was thinking beyond his time at the Pru. It leaves a negative residue.”
Prudential shareholders erupted after the company said Thiam would take up the outside interest on Wednesday, having already been ruffled by a lack of detail on the AIA acquisition and the fundraising.
Last night one said: “The timing was not ideal, unfortunately. He needs to sit down with his large investors and explain everything he’s doing.”
With Thiam visiting the US, panic swept through the Prudential camp. A farcical picture of events followed.
City sources blamed SocGen for “jumping the gun” by announcing Thiam’s nomination without running it past the Prudential board. Sources in Paris insisted the British management was fully aware of the announcement before it went out.
Shore Capital analyst Eamonn Flanagan summed up the mood in the market. “Turning it down was common sense. But what on earth were they thinking in the first place?”