Wednesday, 25 Nov 2020

Australia's AMP receives takeover offer from Ares Management

(Reuters) – AMP Ltd AMP.AX said on Friday U.S.-based Ares Management Corp ARES.N had made a non-binding offer to buy the troubled Australian wealth manager, sending its shares soaring the most in over 17 years.

FILE PHOTO: The logo of AMP Ltd, Australia’s biggest retail wealth manager, adorns their head office located in central Sydney, Australia, May 5, 2017. REUTERS/David Gray

The Sydney-based company said discussions were at an early stage and did not disclose the offer value. AMP had a market value of A$4.40 billion ($3.1 billion) as of Thursday.

Australia media, which first reported the takeover discussions, said Ares had offered about A$5 billion. Ares declined a Reuters request for comment.

AMP shares surged 21.5% in early trade to A$1.555, their highest level since early September.

The wealth manager’s shares have lost over two-thirds of their value since a public inquiry in 2018 exposed systemic wrongdoing at the company including charging fees for advice that was never given, taking insurance premiums from the accounts of dead clients, and misleading a regulator.

The revelations led to the exit of its chairwoman and CEO, and it lost another chairman this year over its handling of an employee misconduct complaint.

Clients have fled the company, with net cash outflows of about A$2.4 billion from its flagship fund management arm in the third quarter.

AMP sparked talk of a buyout or break-up in early September when it put all its assets under review.

On Friday it said it had received “significant” interest in its assets and was evaluating a range of options, including sticking with its own three-year turnaround plan.

AMP ceded its position as Australia’s largest wealth manager to IOOF Holdings Ltd IFL.AX after its rival bought National Australia Bank Ltd’s NAB.AX financial advisory arm in August.

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