Yahoo Finance Aviva looks to win back disgruntled investors with historic share buyback
Aviva has unveiled its biggest share buyback plan in recent history a day after it offered thousands of investors a £14m apology for its preference share saga.
The 320-year-old insurance giant has promised to buy back up to £600m worth of its shares, its biggest in well over a decade and double the size of last year's.
The amount is more than the £500m Aviva had earmarked back in March, when it said it was looking to deploy its £2bn war chest by purchasing its shares, going after M&A deals and paying down debt.
The FTSE 100 insurer decided to boost the target for its share buyback after realising it is likely to spend less than the initial £600m it had earmarked for acquisitions this year, one source said.
Aviva is in the middle of trying to rebuild trust among its investors after its botched attempt to scrap £450m worth of high-paying preference shares. It later reversed on that plan amid a furious backlash from MPs, fund managers and pensioners, who believed the shares were irredeemable.
It announced the large share buyback the morning after it promised to offer a "discretionary goodwill payment" to the investors who lost money by selling their preference shares between March 8 and 22.
The company, once described by its boss Mark Wilson as a lazy "couch potato" stuffing itself with junk food and staring blankly at the TV, announced that it was sitting on a £2bn pot of spare cash back in March.
Mr Wilson said at the time that the sluggish business he inherited in 2013 had now become a "triathlete" after slimming down and boosting profits. However analysts said this week that the row over its preference shares had been a "costly mistake" that had damaged its reputation.
