NAB Officially Withdraws AXA Bid Paving Way For AMP
Australian wealth manager AMP is firmly in the driver’s seat to acquire AXA Asia Pacific Holdings (APH) after NAB officially withdrew its 10 month long $14 billion bid.
Cameron Clyne, chief executive of NAB made the decision public after the close of the market on Tuesday, following the decision by the competition regulator to deny support for the lenders bid to acquire APH.
“NAB remains very committed to participating in the wealth management industry, which is an important part of the bank’s future,” he said. “However, considering all the options, continuing with this agreement is not in the best interests of shareholders.”Mr. Clyne said in a statement.
NAB had re-tabled its bid, after the initial proposal was rejected by the Australian Competition & Consumer Commission (ACCC) in April.
The lender had proposed some concessions designed to allay the competition concerns held by the regulator, which included the divestment of retail investment platforms owned by the target to third parties.
After a long running saga, last week the ACCC once again failed to support the bid, ruling that a divestment would still fail to guarantee that there would be sufficient competition within the Australian wealth management industry.
NAB’s withdrawal no paves the way forward for AMP to proceed with its rival bid for APH, and a spokesperson for the company said the wealth manage remained strategically interested in APH at the right price.
With NAB’s acquisition attempt effectively over, the spokesperson added that AMP was “considering our position in the light of this announcement”.
The problem with AMP’s bid lies in the fact that a large fraction of its bid was made up of shares, the value of which has declined in recent months.
The Australian citing an unnamed source close to APH chairman Rick Allert suggests that Mr. Allert had a strong sense of value, and would refuse to endorse a bid that valued the company significantly below the price NAB had offered to pay.
In order for AMP to win board approval from APH, and access the company books, AMP will in all likelihood have to increase the value of its bid, and most likely increase its contribution whilst convincing APH’s parent AXA SA to do likewise.
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