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AMP To Launch Fresh Bid For AXA APH
Australian wealth manager AMP has launched a fresh bid for AXA Asia Pacific Holdings (APH) using a mix of both cash and stock which values the company at $14 billion or $6.43 a share.
It is widely expected that APH’s board will approve the proposed acquisition this week. AMP suspended trading in its stock on Monday pending a material announcement, whilst APH is also expected to undergo a similar suspension of trading.
A deal approved by the targets board will represent a coup for AMP which will end up owning APH’s Australian fund management business for just $300 million more than the price proposed during its first bid, following AXA SA substantially increasing the price it is willing to pay for APH’s Asian businesses.
As part of the terms of the deal AXA SA will underwrite the stock component of the deal which essentially places a floor underneath AMP’s stock price. The new bid is almost identical to the all cash bid that was made by NAB, which was accepted by APH’s board, but blocked by the competition regulator. AMP will not have to raise fresh equity in order to finance the deal and the bid is structured to give APH shareholders the ability to take advantage of any increase in AMP’s stock price.
AMP has a free run at Axa APH after a rival bid from NAB was rejected by the ACCC earlier this year.
AMP in its lobbying against the NAB bid argued that its acquisition of APH would give Australia the ability to build a fifth pillar in the Australian financial services industry.
Last week, as investors anticipated the imminent arrival of a new bid, APH’s stock price rallied 4 per cent.
Given APH’s French parent AXA SA’s intense desire to acquire its subsidiary’s Asian assets, it made sense for it to raise the level of its contribution to the renewed joint bid.
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