Most AXA Asia Pacific directors back new AMP bid
The Asia-Pacific arm of French wealth manager AXA has tentatively welcomed a revived takeover offer from Australian insurer AMP, saying Tuesday that five of its six board members backed the proposal.
AMP made a new bid worth at least 13 billion dollars (12.8 billion US) on Monday for AXA Asia Pacific Holdings (AXA APH), saying the deal could reshape Australia's financial services market which is dominated by four banks.
The deal requires the unanimous support of AXA APH's six independent board members to proceed. The company said five backed the deal while the sixth was seeking more information.
"A majority of the independent directors believe AMP and AXA SA's proposal provides minority shareholders with appropriate value for their investment... supported by significant downside protection," AXA APH chairman Rick Allert said.
"As a result, we believe the proposal is in the best interests of AXA APH minority shareholders."
Under the offer, AMP would merge AXA's Australian and New Zealand businesses with its own and sell AXA's Asian operations to its French parent company AXA SA, allowing that firm to expand its footprint in the developing region.
The new AMP offer comes after its play last year for AXA APH was trumped by a higher offer from major Australian bank NAB. The NAB bid was then dropped in September twice being rejected by competition regulators.
Investors said despite the split within the AXA Asia Pacific board, the new deal -- which offers AXA APH shareholders at least 6.43 dollars per share in cash and scrip -- was likely to receive the firm's approval.
"Given five of the six have said yes, I'd be surprised if it doesn't go through," Peter Vann, head of research at Constellation Capital Management, told Dow Jones Newswires.
"If the sixth has a valid concern, then the other five probably wouldn't have gone the way they did."
AMP chief executive Craig Dunn said Monday that the offer was compelling and that AXA Asia Pacific was a "natural partner" for AMP.
"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," he said.
© 2010 AFP