The Financial Conduct Authority (FCA) will review Aviva’s (LON:AV) treatment of holders of its preference shares, Reuters has reported. The news comes after the blue-chip insurer cancelled the controversial plan last week.
Aviva’s share price has lost ground in London in today’s session, having given up 1.22 percent to 492.30p as of 10:35 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.63 percent lower at 6,956.38 points. The group’s shares have lost about 7.6 percent of their value over the past year, as compared with about a 5.5-percent dip in the Footsie.
FCA to conduct review
Reuters reported today that the FCA had said in a letter to the Treasury Select Committee that it was “focusing on the treatment of those holders (and potentially now former holders)” of Aviva’s “irredeemable preference shares that may have lost out financially as a result of these events”.
The blue-chip group recently unveiled plans to cancel its preference shares which do not give their holders any voting rights and instead offer a fixed rate of interest. The move, however, prompted investor backlash and Aviva subsequently decided to scrap the plan.
“We are undertaking a review to establish whether there are circumstances that might require an investigation to be conducted,” the watchdog continued, as quoted by the newswire, adding that it was also looking at whether the way the FTSE 100 insurer’s plan was communicated was in line with listing, transparency and disclosure rules.
Analysts on Aviva
The 17 analysts offering 12-month price targets for Aviva for the Financial Times have a median target of 590.00p on the shares, with a high estimate of 636.00p and a low estimate of 456.00p. As of March 23, the consensus forecast amongst 20 polled investment analysts covering the blue-chip insurer has it that the company will outperform the market.