PRUDENTIAL TRIED to put its abortive $30 billion-plus takeover attempt of AIA behind it yesterday with news of a big rise in half-year profits and confirmation the forecast £450 million (€547 million) bill for the audacious bid had been cut by more than £70 million.
Tidjane Thiam, the Pru chief executive whose job initially appeared under threat in the wake of the failed AIA deal, said strong growth in sales and profits in both Asia and the US drove the UK life assurer’s results. The Pru’s operating profits were up 41 per cent at £968 million from £688 million in the first half of last year, although these were boosted significantly by £123 million of gains on equity derivatives in its US business.
The collapse of the Pru’s bid for AIG’s Asian business after the US insurer’s board voted not to consider a lower offer from the UK group bought bitter recriminations from some of the Pru’s biggest shareholders.
Some still want to see leadership changes at the group following the episode, with the focus on Harvey McGrath, chairman, and other board members.
Mr Thiam said he believed the Pru had the support of “the body of its shareholders” yesterday, but declined to discuss the future of any member of the board.
Mr McGrath was not made available for comment. One leading shareholder was happy with the results and said they illustrated why the company had not needed to pursue AIA in the first place.
“This will take some of the pressure off management in the short term, but this story still has a long way to go,” the investor said.– (Copyright The Financial Times Limited 2010)
