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AMP May Walk Away From AXA APH Deal
Australian wealth manager AMP is likely to walk away from the battle to acquire AXA Asia Pacific Holdings (APH), if the competition regulator decides the clear the way for NAB’s rival bid to acquire the company, The Australian is reporting citing an unnamed source familiar with the deal.
The source suggests that AMP is reluctant to engage NAB in a bidding war for the target, after its initial overture was rejected by APH’s independent directors. Contrastingly NAB’s rival bid has won the backing of the same board members and APH’s French insurer parent AXA SA.
AMP has said it is considering its position and awaiting a determination from the Australian Competition & Consumer Commission (ACCC) in relation to both its bid and that of NAB.
The competition regulator’s ruling on both bids is expected to occur on April 22nd, and if the regulator fails to approve NAB’s bid or places onerous restrictions on the acquisition, has the potential to place the ball back firmly in AMP’s court.
Last month the regulator delayed delivering a verdict, and this has led to speculation that it may block any deal initiated by NAB to acquire APH. The ACCC released a statement of issues which raised a larger number of concerns over the NAB bid than the AMP bid, particularly with the aspect of retail investment platforms.
APH’s French parent AXA SA currently owns 53.9 per cent of the company, and agreed a similar deal with NAB to the one initially struck with AMP, where it agreed to sell its entire stake in the company to the acquirer, whilst simultaneously agreeing to buy back APH’s assets .
Both NAB and AMP plan to hang on to the Australian and New Zealand businesses, and an acquisition would most certainly propel the former into a dominant market position in the life insurance and wealth management sectors in the two countries.
An NAB acquisition would be the largest transaction in the Australian financial services sector, larger even than Westpac’s 2008 acquisition of St. George for $12.37 billion.
Both deals also require the blessing of Federal Treasurer Wayne Swan and minority shareholders via a vote at a scheme meeting.
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