Australia's AMP makes fresh bid for AXA Asia Pacific
Australian wealth manager AMP made a new bid Monday for AXA Asia Pacific worth at least 13 billion dollars, saying the deal could create a major new player in the country's financial services landscape.
The announcement comes two months after National Australia Bank (NAB), one of Australia's four big banks, ditched its offer for AXA Asia Pacific after it was blocked by competition regulators.
AMP said it was teaming up with AXA Asia Pacific's French parent, AXA SA, reviving a partnership that had been trumped by NAB's higher offer.
AMP stands to acquire AXA Asia Pacific's Australian and New Zealand businesses while AXA SA would take charge of its subsidiary's Asian arm, company statements said.
AXA Asia Pacific added it was considering the deal, which Dow Jones Newswires said was worth at least 13 billion dollars (12.86 billion US).
AMP chief executive Craig Dunn said AXA Asia Pacific was a "natural partner" and the merger could create a much needed fifth pillar in the Australian financial sector, which is dominated by four major banks.
"It makes economic sense, is an excellent strategic fit with our current business and has a risk profile we understand and are well-placed to manage," he said in a statement.
"The combined businesses would see AMP become the leading wealth management company in one of the world's most attractive wealth management markets, which is expected to more than double over the next decade."
AMP said its offer of 6.43 dollars per share -- consisting of cash and AMP shares -- as well as AXA Asia Pacific's 2010 final dividend of up to 9.25 cents per share, made for a compelling package.
Its previous offer of 6.22 dollars per share -- a mix of cash and stock -- was rejected in December by AXA Asia Pacific Holdings' independent directors, who said the cash component was too low.
AMP's renewed offer comes one month after big-four lender National Australia Bank terminated its all-cash bid for AXA Asia Pacific after it was twice blocked by regulators on competition grounds.
Australian officials said they feared a National Australia Bank takeover -- which also would have involved AXA SA taking on the Asian business -- would shrink the local financial services industry.
The Australian Competition and Consumer Commission has previously said it does not have the same concerns about an AMP buy-out and the New Zealand Commerce Commission has previously also given the go-ahead.
In an early report, the commission suggested that in some areas, the added scale of a combined AXA Asia Pacific and AMP business would allow it to better compete with the major banks.
If successful, the deal will also give the European parent company an expanded footprint in Asia as it focuses on developing markets.
"A deal would be a coup for AMP," said market strategist with IG Markets Ben Potter. "It has long wanted to buy its Australian rival -- as well as for the target's French parent AXA SA, which has sought to offload the unit's Australian assets and to acquire outright its Asian assets."
Shares in AXA Asia Pacific Holdings, which traded at 5.78 dollars before the announcement surged 6.75 percent on the announcement to close Monday at 6.17 dollars. AMP shares gained 2.25 percent to 5.45 dollars.
-- Dow Jones Newswires contributed to this story --
© 2010 AFP