Pru bosses defiant after AIG deal collapse

Prudential's top bosses today defied calls to quit over the collapse of its $35.5bn (€29.5bn) bid for US insurance giant AIG's Asian arm.

Chairman Harvey McGrath told the Financial Times that the board was "completely behind" the current management including new chief executive Tidjane Thiam.

He also called the investors calling for change "outliers", with most major shareholders backing the current board.

The bid for AIA foundered earlier this week after AIG refused to renegotiate the price - leaving the Pru with a £450m (€543.9m) bill and Mr Thiam's Asian strategy in ruins.

Mr Thiam told the FT that it was a "fallacy" to link his failure to land the AIA deal with his ability to run the business.

"To say I'm inexperienced in running a $35bn transaction, that's true. Not many have experience of running a $35bn transaction," he said.

Mr McGrath said the management team was "quite devastated" when AIG rejected the lower price, but "not worried at all about our positions".

But the board has so far refused to apologise for the huge bill landed on investors for the collapse and is set to face severe criticism from shareholders at its annual meeting in London on Monday.

The AIA deal - which Prudential intended to fund through a record £14.5bn (€17.5bn) cash call on shareholders - was dogged by regulatory concerns over the capital position of the enlarged group last month.

Mr Thiam also misjudged the mood of investors worried over the steep price being paid when he accepted a non-executive role at French bank Societe Generale. He quickly withdrew from the post after criticism.

Mr Thiam became the FTSE 100 Index's first black chief executive when he took over last October after joining the Pru as chief financial officer from rival Aviva in 2008.

He began his career with management consultant McKinsey and is a former Ivory Coast government minister who left the African country following the December 1999 military coup.

Mr Thiam said in an interview with Bloomberg that he does not feel under pressure from shareholders to quit.

He said: "I am the servant of the shareholders.

"If my shareholders want me to go, then of course I would. They have not expressed that desire."

The Pru chief added the group had been working on the deal for a long-time - even before his appointment at the helm.

He said it was a "big surprise" that AIG declined to accept the lower offer, having reached agreement the night before with AIG management.

Mr Thiam also said he was "very sorry" that the group would have to fork out money in break fees and costs of the failed bid.

"We gave it our best and I'm proud of what the team did, but yes there were mistakes," he said.