Australia’s AMP says Ares buyout offer values it at $4.5 billion

In this news, we discuss the Australia’s AMP says Ares buyout offer values it at $4.5 billion.

SYDNEY (Reuters) – Struggling Australian wealth manager AMP Ltd AMP.AX said on Monday that a conditional takeover offer from US firm Ares Management Corp ARES.N had an implied value of A $ 6.36 billion ( 4.47 billion dollars), triggering an increase in its price share.

Shares of AMP, which is considering a potential sale or break following a series of scandals, rose 9.8% to A $ 1.68 on Monday, after the company disclosed the price involved in the Ares proposal.

It was the highest since July, but below AU $ 1.85 per share in Ares’ offer – which a person with direct knowledge of the matter told Reuters was the only offer for the whole of the group to date – indicating that investors see some uncertainty over the deal.

Other parties have expressed interest in separate parts of the company, which has banking, fund management and financial planning units, said the person, who was not authorized to speak publicly on the question and therefore refused to be identified.

Simon Mawhinney, chief investment officer of Allan Gray, AMP’s second largest shareholder, said the market reaction was somewhat surprising.

“We will apply our minds to all offers for AMP in whole or in part when these offers are confirmed,” Mawhinney said in an email to Reuters.

Ares indicative offer price represents a 21% premium over AMP’s closing price of A $ 1.53 on Friday, as shares had already jumped after AMP announced receipt of the offer Earlier in the day.

In a brief update, the Sydney-based company said talks were at an early stage between itself and the US asset manager, and there was no certainty on a transaction at this time. price.

The veteran Australian retirement savings manager has lost more than two-thirds of its value since a public inquiry in 2018 uncovered systemic wrongdoing at the company, including charging fees for advice that failed. never been given, taking insurance premiums on the accounts of deceased customers, and misleading a regulator.

The more than 160-year-old wealth manager also recently suffered multi-billion investment outflows following concerns about the conduct of the former chief executive of his fund management unit that led to his demotion.

Earlier this year, AMP ceded its position as Australia’s largest wealth manager to IOOF Holdings Ltd IFL.AX after its rival bought the NAB.AX financial advisory service from National Australia Bank Ltd.

Reporting by Paulina Duran in Sydney and Rashmi Ashok in Bengaluru; Editing by Daniel Wallis and Christopher Cushing

Original © Thomson Reuters

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