Investors bay for Bloomer's blood after Pru rights shock

Investors bay for Bloomer's blood after Pru rights shock

Leading investors are putting pressure on Jonathan Bloomer to stand down as chief executive of Prudential after last week's surprise £1 billion rights issue to finance growth of the business.

The fundraising was seen as just the latest in a series of shocks sprung on the City by the Pru, which have made Bloomer deeply unpopular with investors.

'If a chief executive oversees a failed takeover, cuts the dividend and launches a shock rights issue, usually his days are numbered,' said the head of UK equities at one leading fund manager.

'I think he will be gone within months,' said the head of investments at an insurance company. 'Prudential's market value has fallen by £1.6bn [since it launched the rights issue] yet it is only raising £1bn. That sends a strong message to the company.'

Advertisement starts

---

---

Advertisement ends

The financial services expert at another fund manager said: 'It is really worrying that a company like Prudential could go from saying there were no problems with capital just two months ago to needing to raise £1bn'.

The catalogue of disasters started with the failed bid for American General; the company then insisted it would hold its dividend but cut it by 40 per cent as soon as David Clementi took over as chairman. This year it failed to find a buyer for the remaining 79 per cent stake in its Egg internet banking business.

'Every time you are given assurances on something by Jonathan Bloomer, they are proved to be wrong.'

Bloomer is engaged in a frantic series of meetings to get investors on his side over the rights issue. The Pru believes these have been going well.

But one investor said: 'If they are trying to grow their UK business at rates of return which are not going to look that great over the next few years, we would need to see evidence that premium rates [for its savings products] will be increasing.'

Guardian Unlimited © Guardian Newspapers Limited 2004