If Prudential's bid to acquire the Asian arm of AIG fails as a result of institutional hostility, the outcome will be supremely ironic. The Pru is, after all, the historic pioneer of shareholder activism in the UK, with a record of engaging with underperforming companies that goes back to the 1950s.

In those days it would have been unthinkable for fellow institutions to line up against each other in this way. So much the better that the governance climate is now less inhibited. Yet the question remains whether institutional pressure to prevent the Pru overpaying for AIA is well directed.

Institutional investors' record on big bids has not been good. Few objected to the disastrous deal in 1997 whereby Imperial Chemical Industries' acquisition of Unilever's speciality chemicals business brought Britain's leading manufacturer to its knees. Many were egging on the management of Marconi in its ill-judged and ill-financed acquisitions in the US in the late 1990s. There were not many objections either to Vodafone's mega-bid for Mannesmann in 2000, which destroyed shareholder value on a monumental scale.