Bloomer: I'm on the way out

ALL the hallmarks of a classic City-style assassination are present. Prudential, Britain's second-biggest insurer and one of the largest investors in the City with £187bn of funds under management, is looking for a successor to replace lame-duck chief executive Jonathan Bloomer.

It is no secret that the knives are out for Bloomer. Only last week he told reporters he still felt under pressure after the insurer's controversial £1bn rights issue last year. 'I'm not lifting the pressure off any of my people, why would I lift it off me?' he said.

Privately, Bloomer has admitted to friends: 'I am on my way out.' The only question is when.

Bloomer, 50, would like a long goodbye, staying on for at least another year as part of a stage-managed and dignified exit. But Sir David Clementi, Prudential's highly regarded chairman, is thought to have other ideas. Insiders say the former Deputy Governor of the Bank of England has given up on accident-prone Bloomer and wants him out 'sooner rather than later'.

The issue of who takes over was on the agenda of leading shareholders in recent meetings with the Pru. Many are still smarting from the blundered rights issue last year and have made it clear they will demand Bloomer's scalp if he makes one more error.

An outsider is now regarded as most likely to fill one of the hottest jobs in the City. The early front-runner is former Pru executive Mark Tucker. He became finance director of HBoS after losing out to Bloomer in 2000 for the top post.

'He'd love to do it and he left because he wasn't able to,' said an industry analyst. 'He'd be a natural guy to approach and I'm sure he'd do a good job.'

Internal candidates include Mark Wood, who runs the UK and Europe business, and finance director Philip Broadley.

Last week's announcement of a 39% improvement in annual operating profits to more than £1.1bn might have drawn the fire of some of the most disgruntled shareholders, but is unlikely to have saved Bloomer.

A recent survey showed Bloomer generated more negative column inches last year than any other FTSE 100 chief executive.

He received only 39 positive articles - against 112 that were unfavourable. 'Jonathan is the nicest chap you could meet,' said one analyst. 'Unlike most chief executives, he doesn't have a monstrous ego, but what he does suffer from is an inability to take advice.'

Bloomer has been with the Pru for ten years. He joined as finance director from the now-defunct accountancy firm Arthur Andersen, serving under the hapless Sir Peter Davis until succeeding him as chief executive in 2000.

His profile soared a year later when he orchestrated the Pru's most audacious deal yet - a takeover of US rival American General to create a £30bn-plus insurance heavyweight.

Unfortunately for Bloomer, shareholders were not convinced by the deal. Undeterred, he went on holiday to Barbados, only to learn that AIG, another US insurer, had launched a rival bid.

He had to rush back to London to try to repair the damage. But the deal was lost and Bloomer's reputation took a drubbing, even though the Pru walked away with a £315m break fee.

But the first real sign that Bloomer's authority was being undermined came two years ago when Clementi, the new chairman, shocked investors by slashing the dividend by 40% - after three years of Bloomer saying he was committed to a progressive payout policy. The inevitable row about the size of his pay packet - £1.1m last year - duly followed, as did the badly bungled sale of internet bank subsidiary Egg.

Matters came to a head last year with a £1bn rights issue, the biggest cash call of its kind in the City for years. Having extolled the virtues of expansion overseas, especially in Asia, Bloomer suddenly turned tail and said the money was needed to fund growth in Britain.

The Pru got its cash, but Bloomer declined to take up his full entitlement to new shares in the rights issue. That might have been the final straw for Clementi, who chairs the committee that will decide who succeeds Bloomer.

Also on the committee are Sainsbury board member Bridget Macaskill, former Reuters finance chief Rob Rowley and Sandy Stewart, chairman of Scottish Amicable Life Assurance.

The longer there is a power vacuum at the Pru, the more it becomes a takeover target. Recent reports have linked the Pru with French insurance giant Axa, Germany's Allianz, or even Norwich Union-owner Aviva. Investment bankers are salivating at the prospect of fat fees.

Officially, it's business as usual. 'The board works on the issue of succession on an ongoing basis,' said a Pru spokeswoman. 'There are plans in place for all executives and senior managers. The board is fully supportive of Jonathan.'

But whatever the official version, Bloomer is clearly living on borrowed time. And it might be running out for him much faster than he thinks.

'Is he going to be there next month? Yes,' said a senior source. 'Is he going to be there in a year? Who knows.'