AMP Says Ares Offer Values Wealth Manager at $4.5 Billion
AMP Says Ares Takeover Bid Values Wealth Manager at $4.5 Billion
(Bloomberg) -- Australian wealth manager AMP Ltd. said a preliminary takeover approach from U.S. private equity firm Ares Management Corp. values the company at A$6.4 billion ($4.5 billion.)
The proposal has an implied value of A$1.85 per AMP share, the Sydney-based company said in a statement Monday. The shares closed 9.8% higher at A$1.68 in Sydney, adding to a 20% surge Friday when the talks were first disclosed.
The 171-year-old firm effectively put itself up for sale after a sexual harassment scandal led to a boardroom shakeout, capping a torrid two years that saw the stock lose three-quarters of its value. For Los Angeles-based Ares, buying AMP, which manages about A$320 billion across pension savings, infrastructure and real estate, would be a quick way to scale up in Australian funds management, where it began offering its first investment products this year.
“There is no guarantee that a transaction will eventuate and no certainty with regards to price,” AMP said.
Ares said in a statement last week the offer was subject to extensive due diligence, evaluation of the sale of some AMP assets and may involve co-bidders.
The disclosure of the offer price may now flush out other bids. AMP said last week it had “received significant interest” in its assets and businesses since hiring Goldman Sachs Group Inc. and Credit Suisse Group AG to review its portfolio.
AMP, which sold its life insurance arm to Resolution Life, now comprises Australian banking and wealth management, known as AMP Australia; AMP Capital, the A$190 billion funds manager and most-profitable arm; and New Zealand wealth management, where it’s trying to expand after scrapping plans to sell the unit in May.
Long-suffering investors may prefer a quick, clean takeover rather than a messy and prolonged breakup. In August, Debra Hazelton replaced finance industry veteran David Murray as chairman, and the head AMP Capital was demoted as a sexual harassment scandal sparked the second boardroom shakeup in just over two years. AMP was also damaged by revelations it charged fees to clients for services they didn’t receive, then lied to regulators about the wrongdoing.
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