Pressure back on Pru as AIA gets new boss
AMERICAN International Group (AIG)’s hiring of Mark Tucker to run its Asian arm piles pressure on Prudential to realise value from its Far Eastern operation, analysts argue.
Mark Tucker, a former chief executive of Prudential, will take over from Mark Wilson at the head of American International Assurance (AIA) before its Hong Kong flotation in the autumn. Tucker’s surprise appointment will intensify competition between AIA and Prudential in the region. For a decade until 2003 he was responsible for building Prudential’s Asian unit, Prudential Asia Corp (PAC), and was the architect of the British insurer’s longstanding ambition to buy AIA.
After current Prudential boss Tidjane Thiam embarrassingly failed to garner shareholder support for a $35.5bn (£23.3bn) takeover of AIA, industry insiders said Tucker’s reappearance could pave the way for the reverse situation, whereby a publicly-listed AIA would bid for PAC.
Analysts at Merrill Lynch also said a Tucker-run AIA would be able to poach senior staff from Prudential’s Asian business. They wrote: “Things appear to be moving fast and the pressure on Prudential’s management and board has seldom been higher, in our opinion.”
Barrie Cornes at Panmure Gordon said PAC would be worth £12.6bn based on the multiple for Prudential’s revised AIA offer. A sale or initial public offering (IPO) would boost Prudential’s overall market capitalisation 51 per cent to £19.9bn.
Cornes said: “[Given Tucker’s] detailed background knowledge of Pru’s Asian operation, it is not hard to see how one day there may be an offer for Pru’s Asian operation.”
MARK TUCKER
FORMER CHIEF EXECUTIVE OF PRUDENTIAL
MARK?Tucker is still revered by Prudential’s staff in Asia. A chartered accountant who began his professional life as a footballer for Wolverhampton Wanderers, he is a competitive character known for squeezing the best out of the teams he leads.
Tucker spent 23 years at the FTSE 100 insurer. He joined Prudential Portfolio Managers in 1986, moving to become head of the company’s Asian operation in the mid-1990s. He ruthlessly expanded in the region and took on AIA in a head-to-head battle.
Tucker left to join Halifax Bank of Scotland as finance director in 2004, but was tempted back to?Prudential as chief executive a year later. He stayed until October 2009, when he quit, to be replaced by Tidjane Thiam.
“He is a very, very driven personality,” one City analyst says. “You get the impression you’d know if you were working for him.” Tucker’s inside-out knowledge of Prudential Asia Corp will be a formidable weapon as he takes over at AIA. Prudential made much fanfare when Barry Stowe joined its board from AIA in 2006. In swooping on Tucker, AIA has pulled off the same coup in the opposite direction. Prudential’s top brass will be feeling nervous.