For what it's worth I've concluded that the prospects of Aviva even trying to get away with paying just par for any of these prefs is now minimal. The sh*tstorm they have created already must have shocked them, and the actual savings they would achieve by redeeming at par would simply not be worth the massive reputational damage they would suffer.
I've also no doubt at all that they are being leant on very heavily by HMG, the FCA and the City institutions generally not to rock the boat. Aviva simply can't afford to upset the establishment for such a relatively paltry saving.
I would therefore confidently predict that they will end up buying in the prefs at not far short of their market price before this happened - and putting my money where my mouth is I have bought accordingly.
However, one interesting aspect of the matter is whether holders of the prefs could sue their brokers for misrepresentation on the basis that when they bought the prefs there was an implied term that they could not be redeemed at par.
The fact that they are described as irredeemable on the contract note would at the very least cause the brokers some discomfort, as the clear implication is that it means what it says - that the shares cannot be redeemed. The average retail buyer would not be expected to know that the word `irredeemable' actually meant redeemable by the back door with the assistance of a top corporate lawyer.
Of course there would be plenty of interesting legal arguments about who the actual purchase contract was with - in most cases the broker is selling as agent, not as principal, so there would be the question of who one would sue. There might also be questions of negligence, in a broker allowing a customer to buy an irredeemable share that they knew (or would be deemed to know) was not irredeemable.
But on a small transaction of a few thousand pounds the broker might not want to run the risk of being found liable with all the consequences that such a precedent might set, and I've a feeling they would decide just to pay up.
In fact, thinking about it, I might well write to my brokers on these lines and see what they have to say - it should certainly grab their attention!
