5th UPDATE: AMP Offers At Least A$13 Billion For AXA Asia Pacific
15 Novembre 2010 - 11:14AM
Dow Jones News
AXA Asia Pacific Holdings Ltd. (AXA.AU) is considering a new
A$13 billion takeover proposal from French parent AXA SA (CS.FR)
and AMP Ltd. (AMP.AU) that's likely to conclude a year-long battle
for the wealth manager.
A deal would be a coup for AMP, whose previous bid was rejected
by the target in favor of an all-cash offer from National Australia
Bank Ltd. (NAB) in December. The NAB deal was later blocked by the
Australian Competition and Consumer Commission, which said it
wouldn't oppose a takeover by AMP.
The latest cash and stock offer has a floor of A$6.43 a
share--the same level as NAB's all-cash offer--subject to the AMP
share price remaining above A$4.50. AMP shares last traded at
A$5.59.
"It would be very hard for the AXA APH board to say it wasn't a
good idea given they accepted A$6.43 from NAB and this deal comes
with an ACCC green light," said Brett le Mesurier, an analyst at
Axiome Equities.
AMP plans to keep the Australian and New Zealand assets of AXA
APH and sell the Asian business to AXA SA, which currently own 54%
of the target.
The deal is crucial to the French company's global strategy of
increasing exposure to developing markets.
"This transaction, if successful, would allow AXA to increase
its exposure to high growth Asian markets where AXA APH Asian
operations continued to perform very strongly in 2010," AXA said in
a statement.
AXA SA will pay around EUR1.8 billion in cash under terms of the
new deal, up from the EUR1.4 billion it would have paid in the
failed NAB bid.
AXA SA said the deal would increase earnings-per-share in
2011.
Paris-based Keplar analyst Pierre Flabbee said a revised offer
had been expected and makes it more likely that AXA SA will finally
get a deal. Flabbee warned, however, that uncertainties still
remain, as the offer needs to be approved by the AXA APH
independent directors who rejected the previous joint AMP/AXA
bid.
He said the latest offer was "clearly better" than the last, and
estimated that the guarantees being offered to AXA APH minority
shareholders could add EUR300 million to AXA SA's costs if AMP
shares fall substantially.
At 0913 GMT, AXA SA shares were up EUR0.16, or 1.3%, at
EUR13.40, one of only two risers on the CAC 40 benchmark index,
which was down 0.5%.
AXA APH's independent directors in December rejected AMP's
A$6.22-a-share cash and stock offer for the business as too low,
and said that the offer didn't include a big enough cash
component.
Under the new and more complicated proposal, minority AXA APH
shareholders would receive 0.73 AMP shares and a variable cash
amount based on AMP's average share price for 10 trading days after
the deal becomes effective.
Shareholders would receive A$6.43 if the average AMP share price
was equal to, or greater than, A$4.50 but less than A$5.60.
If the AMP average share price was A$5.60 or higher, AXA APH
shareholders would receive 50% of the benefit of that higher share
price. If the average share price was below A$4.50, the value of
the bid would fall below A$6.43.
Goldman Sachs analyst Ryan Fisher said the proposal is "a well
thought-out structure, intended to satisfy AXA APH's desire for
price protection."
The offer is an 11% premium to AXA APH's last traded price on
Friday.
The proposal would need to be approved by AXA APH's minority
shareholders and Australia's treasurer.
A spokesman for the treasurer said he doesn't comment on
commercial matters.
-By Rebecca Thurlow and Cynthia Koons, Dow Jones Newswires;
61-2-8272-4679; rebecca.thurlow@dowjones.com
(Lyndal Mcfarland in Melbourne and Digby Larner in Paris
contributed to this article.)
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