AMP Ltd’s A$13.3 billion bid for rival Axa Asia Pacific Holdings in the best interests of minority shareholders, say experts

Comments Off | 01-22-2011

According to independent experts, AMP Ltd’s A$13.3 billion bid for rival Axa Asia Pacific Holdings is in the best interests of minority shareholders. The experts have acknowledged that it would serve minority stakeholders better if the deal made by the wealth manager is successfully.

Grant Samuel reiterated that the value to be delivered to AXA Minority shareholders under the Proposal is compelling. Simply put, AXA is worth more on a break-up basis than as a standalone single entity, said Samuel. AXA APH independent directors unanimously recommended that minority shareholders support the proposal in the absence of a superior proposal.

The Grant Samuel report says a public auction for AXA has been underway since December 2009 – ample time for any interested third party to consider its position and submit a higher offer. It says in the absence of any higher offer, it appears reasonable to conclude that the price to be paid under the proposal is the highest price that can be realized in the current market.

Grant Samuel also looks at disadvantages of the proposal and concludes they are not significant, relating to the medium term prospects of the merged group. It says under the merged group AXA minority shareholders will have greater exposure to the Australian superannuation sector and Australian asset management than they currently have.

According to the report, the merger synergies that AMP has announced may take longer to realize than currently expected, may never be realized or may be more costly to achieve than currently estimated. In addition effective management of multiple groups of financial planners will be challenging and there is a risk that the merged business could lose customers, staff and revenue, said the report.

Under the proposed scheme of arrangement, minority shareholders of AXA AP will get A$6.43 a share in stock and cash. The offer is for 0.73 AMP stock and a variable amount of cash, based on the weighted average trading price of AMP’s shares.

However, AMP chairman Peter Mason noted on his part that Australians and New Zealanders deserve a strong, local non-bank competitor in the wealth management sector. He said that by merging the strengths of both companies, the proposal will establish a robust competitor and provide enhanced, competitively priced products, services, investment opportunities and financial advice to consumers.

  • Facebook
  • LinkedIn
  • MySpace
  • Twitter
  • Yahoo! Buzz
Tags: , , , , ,
Posted in Foreign Direct Investment/FDI New Zealand, General |

Comments are closed.