2nd UPDATE: National Australia Bank Terminates AXA APH Bid
14 Septembre 2010 - 12:46PM
Dow Jones News
National Australia Bank Ltd. (NAB.AU) on Tuesday walked away
from its A$13.3 billion agreement to take over AXA Asia Pacific
Holdings Ltd. (AXA.AU) after the Australian competition regulator
last week said it would block the deal on competition concerns for
a second time.
NAB's move to terminate its deal with AXA SA (CS.FR) over the
ambitious bid potentially paves the way for AMP Ltd. (AMP.AU) to
renew its bid for AXA Asia Pacific. But analysts expect AMP will
not be in a rush to do a deal.
Terminating the deal will also allow AXA SA to start considering
other options as it seeks to buy out AXA Asia Pacific's Asian
operations. It had agreed to buy the Asian operations from NAB
under NAB's buyout plan, after striking a similar deal with AMP
last year before AMP's bid was trumped by NAB.
The Australian Competition and Consumer Commission last week
maintained its April 19 rejection of what would have been the
biggest deal in Australia's financial services history, arguing it
would crimp competition in the market for supply of retail
investment platforms--Internet portals that link retail investors
with the wide range of investment products that fund management
companies provide.
"Although we are disappointed with the decision of the ACCC, we
have a strong position through MLC and NAB's other wealth
management businesses," National Australia Bank Chief Executive
Cameron Clyne said in a statement.
"NAB remains very committed to participating in the wealth
management industry, which is an important part of the bank's
future. However, considering all the options, continuing with this
agreement is not in the best interests of shareholders," Clyne
said.
AXA Asia Pacific Chairman Rick Allert in a statement noted NAB's
decision to withdraw its proposal.
"The directors remain very confident about the future and we
look forward to continuing to deliver shareholder value," Allert
said.
Paris-based AXA SA, which holds a 55% stake in AXA APH, said
Tuesday that it took note of NAB's decision and that it will
continue to review its options in Asia.
"AXA remains fully committed to support the Australia and New
Zealand businesses," it said in a statement, repeating comments
made last week following the ACCC rejection.
Australian analysts expect AXA SA will remain very keen to get
its hands on the Asian operations as it looks for new growth
avenues.
Analysts said last week the French parent is likely to look at a
range of options, which could include increasing how much it will
pay for AXA Asia Pacific's Asian operations, thus allowing AMP to
bid more. Under the deal with NAB, AXA SA had agreed to pay around
A$9.4 billion for AXA Asia Pacific's Asian businesses.
A spokeswoman for AMP said that it continues to view AXA Asia
Pacific's Australian and New Zealand operations as "strategically
attractive" on the right terms, and it is considering its
options.
Buying AXA Asia Pacific would consolidate AMP's position as the
second-biggest wealth manager in Australia and New Zealand, behind
Commonwealth Bank of Australia. And unlike NAB, AMP already has the
blessing of the ACCC to strike a deal after first bidding for the
group late last year.
AMP first bid for AXA Asia Pacific with the backing of AXA SA in
November, offering of 0.6896 AMP shares and A$1.92 cash for each
AXA Asia Pacific share before its offer was trumped by National
Australia Bank. NAB was offering either A$6.43 cash or 0.1745 NAB
shares and A$1.59 for each AXA Asia Pacific share, winning board
support and prompting AXA SA to switch its backing to NAB.
AMP is unlikely to raise its November offer to match NAB's offer
price, which could make it difficult for AXA Asia Pacific's board
to recommend.
AXA Asia Pacific shares closed down 4 Australian cents at
A$5.18.
As for NAB, analysts expect it is unlikely to target any further
large acquisitions in the wealth management space, given the
perception that the ACCC doesn't want to see further consolidation
involving the big banks.
"We think other M&A opportunities for NAB are limited and a
back-to-basics domestic banking strategy will likely ensue," RBS
analysts said last week after the ACCC said it would block the
deal. "NAB's strategy in wealth management should by no means be
changed by missing out on the AXA assets," RBS said.
-By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093;
lyndal.mcfarland@dowjones.com
(Digby Larner in Paris contributed to this report.)
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