Prudential boss Tidjane Thiam continues to court controversy: with the Pru’s £23bn takeover of AIA still up in the air, he’s just agreed to become a non-executive director at Société Générale. Shareholders are already grumbling about his handling of the proposed deal – both in terms of the ticket price and the way he’s sold it to them – so the thought of him giving up a chunk of his time to worry about the problems of a French bank has predictably gone down like a ballon de plomb. One thing’s for sure: if Thiam’s supposed to be on a charm offensive ahead of the Pru’s massive rights issue, he doesn’t seem to be doing a very good job of it…
Thiam will apparently join the SocGen board in May; in return for an annual fee of just over £30,000, he’ll be expected to attend at least five board meetings a year at the Paris-based bank. Now it’s hardly unusual for City bigwigs to take on non-exec positions at other institutions (you might even argue that it’s a good way for them to gain extra knowledge, contacts and experience). However, the difference in this case is that Thiam has just launched one of the biggest and most ambitious takeover bids in UK corporate history – the Pru’s $35bn acquisition of AIA would be a transformational deal that doubles the size of the business. So arguably, he’s got more important things to be worrying about.
The Pru insists that it won’t be a problem, and that SocGen are happy that Thiam will have ‘minimal involvement’ this year. But investors aren’t buying it. ‘Utterly extraordinary’; ‘incredibly arrogant’; ‘a disgrace’ were just three of the choice verdicts given to the Times by unnamed shareholders, while Royal London’s Jane Coffey told the Telegraph that Thiam ‘ought to be busy with the day job’.
By the sounds of it, Thiam wasn’t exactly Mr Popular even before this. Fund managers were already moaning that his recent investor roadshows (to sell the deal to them) have been too short, too casual and too light on detail. He’s claiming that the deal will be profitable within three years, but he’s apparently refusing to give out too many figures before the launch of the prospectus. Which basically means he’s asking investors to support an enormous deal largely on trust, having only been in the job ten minutes.
So taking this SocGen job now is impolitic, to say the least. On the other hand, perhaps he can afford to be blasé. Rumour has it that various wealthy Eastern money managers are queuing up to support the deal – so even if he ends up alienating his UK shareholder base, perhaps he figures that there’s plenty more where they came from…
In today's bulletin:
Darling gets war-chest as borrowing not as awful as expected?
Nissan to turn over a new Leaf in Sunderland
Uproar as Prudential boss takes non-exec role at SocGen
Greenpeace goes for broke with killer Kit Kat campaign
MT talks to The Catering Academy's Louise Wymer