Prudential had negotiated to buy AIG’s Hong Kong-based Asia business, but it was revealed last week that several major shareholders were against the deal, and Prudential raced to renegotiate the deal at a lower price tag of just over $30 billion.
The lower offer price was rejected by AIG, and Prudential so far has announced that no new bid is in the offering.
The failed bid would cost the company around 450 million pounds (US$650 million) in withdraw fees, and company executives, especially Chairman Harvey McGrath and Chief Executive Tidjane Thiam, are increasingly facing investor ire.
In a video interview with McGrath posted on the company’s website, he said that the group’s management team still has the unanimous support of shareholders. “In my conversations with shareholders, there are some who are calling for a change, but I think they are the minority of our shareholder base,” he said.
Both McGrath and Thiam defended the rationale of the AIA bid at the time.
“We have been consistent in our commitment to our strategy and the proposed acquisition of AIA was intended to accelerate this strategy,” Thiam said in a statement. “Throughout the period of our proposed transaction with AIA, our businesses continued to perform strongly, particularly in Asia and the U.S. All of our businesses have a strong momentum and we will continue to focus on delivering shareholder value.”
The meeting on Monday was originally planned for shareholders to approve the merger deal, but now McGrath and Thiam are facing a grilling from shareholders. Thiam, the 47-year-old CEO, apologized to shareholders for the fees incurred, and maintained that the company is committed to expanding in Asia through other means.
