PRUDENTIAL chief Tidjane Thiam expressed regret over his botched attempt to buy AIA yesterday, at a fractious meeting punctuated by calls for a boardroom shake-up.
Thiam, fighting for his career after Prudential was embarrassingly forced to pull out of a $35.5bn (£25bn) bid for AIG’s Far Eastern arm, stopped short of saying sorry. But chairman Harvey McGrath apologised profusely for wasting £450m on advisory fees for the aborted deal. He insisted there was no need for heads to roll at the FTSE 100 insurer but promised to bring in external consultants to help improve the group’s investor relations after the fiasco.
Prudential’s play for AIA was effectively gunned down by shareholders when the US government – which owns 80 per cent of AIG – refused to drop its asking price to $30.4bn.
McGrath said he was “bitterly disappointed” by the collapse of the 11th-hour talks. He said: “Please be in no doubt how sorry we are that we incurred significant costs only to see the deal fall at the final hurdle.”
Describing the past fortnight as “a bruising time”, McGrath continued: “I am sorry we are not progressing with the acquisition… and I’m sorry if this process has caused shareholders discomfort and worry. For that you have my fulsome apology.”
Thiam added that he “very much regretted” the strain put on Prudential’s ties with its owners due to its mistakes during the process.
Small shareholders were in combative mood at the annual general meeting in the QEII Conference Centre in Westminster.
Anthony Watts from Northampton said: “Why did the whole board get it so wrong? Every single one of you got it wrong. You’re a disgrace.”
Demanding to know if there would be resignations, Colin Sains of Essex told McGrath: “At the end of the day you failed. There’s a price for failure.”
Despite the upsets, investors voted through all management’s proposals, although nearly a third rebelled against their right to hold cash calls.
Trying to shield Thiam, who has only held the top job since October, McGrath emphasised the attempt to buy AIA was backed by all 14 board members. He listed 15 special board meetings, two normal meetings, five update calls and seven audit committee meetings held since January.
Shares in Prudential fell four per cent to 534p even though the insurer put out an unexpected trading update showing sales were up 27 per cent to £1.4bn for the five months to May, driven by record new business in Asia.