Pru under fire over AIA bid

City commentators say Prudential is neglecting UK investors.

Pru: comms around AIA bid criticised
Pru: comms around AIA bid criticised

Prudential is shipping a number of its UK comms staff to Asia to shore up support for its transformative bid for AIG in the region, but observers warn that UK backing for the deal has ebbed away amid questionable comms tactics.

It is understood that the UK's largest insurer has temporarily relocated a handful of its PR team to Asia to aid comms around its $53.5bn (£23.6bn) bid for AIG's Asian arm. Brunswick is advising the firm on the deal in both the UK and Asia.

But it is support for the deal in the UK amongst shareholders and media commentators that has proved more problematic. One agency MD commented: ‘There was so much good feeling about the deal initially, but there is resentment that [chief executive Tidjan Thiam] has headed off to woo the Asian market and not paid attention to the UK investors who will fund the whole thing.'

Another agency head said that City sentiment around the deal was largely ‘love the ambition, but hate the execution'.

The feeling that the Pru has fumbled comms around the deal only strengthen last week after what one agency MD called a comms ‘debacle' around the announcement of Thiam's non-exec role at French bank Soc Gen.

Newspaper commentators and shareholders were similarly appalled that Thiam would allow his Sog Gen role to be announced in the middle of such a crucial period for the Pru. Thiam the next day turned down the role and insisted he had not sanctioned the Soc Gen release.

Nevertheless, the media reaction was damming, with Telegraph head of business Damian Reece noting that Pru chairman Harvey McGrath should take responsibility for the ‘farce' and ‘might want to consider some new advisers'.

One senior City PR source noted that the comms advisers had either been excluded from the whole affair or the board ‘is not taking the right advice', while another said it was ‘inconceivable' that Thiam would not have been counselled against accepting the Soc Gen role during the delicate AIA process.

An insurance PR expert noted that the Soc Gen affair reflects the approach the Pru has taken throughout the AIA bid: ‘They seem to have been caught flat-footed by any negative reactions - they really should have better planned for the concerns of some investors and commentators and anticipated all the possible negative arguments.'

He added: ‘They have allowed the story to go from the story being a once in a lifetime deal by a star of the City to negative media coverage amplifying the concerns of a few disgruntled investors.'

There is, however, little suggestion that the deal will be derailed by Prudential's difficulties in engaging the UK media and a section of its own investors. But one observer warned: ‘If a company is seen us unresponsive and unwilling to listen, it will harm the value of the firm long-term',

Prudential and Brunswick both declined to comment.

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