Macquarie Bid Speculation Lifts AMP

By Glenn Dyer | More Articles by Glenn Dyer

Macquarie Group management will come under pressure this morning to confirm whether or not it is interested in bidding for the struggling AMP.

Macquarie is due to report a record interim profit this morning and is due to hold an investor and media briefing soon after.

Macquarie managers will come under intense questioning and no comment will not be enough to deflect interest from media and investors.

After unsourced media reports yesterday that Macquarie might be looking at bidding for AMP. AMP shares jumped more than 7% at one stage.

Even though no one would make any comment on the report, the shares maintained their strength to close at $2.64 yesterday, up 6.8% on the day.

The unsourced reports help take attention away from continuing unhappiness among AMP shareholders about the terms of the $3.3 billion sale of its Australian and NZ life business to UK insurance bottom fisher, Resolution Life.

AMP was valued at $7.76 billion at the close yesterday – less than half the value it was at the start of this year. Any bidding price would have to be at a substantial premium to current price levels to have any chance of winning.

“The idea that Macquarie would get back into this … or that they would make a significant decision like this ahead of the uncertainty next year following the conclusion of the royal commission, is to my mind insane,” said Michael McCarthy, chief strategist at CMC Markets told AAP.

“That said, it’s quite clear the market has got quite excited about the idea.”

AMP last week revealed a sharp rise in client withdrawals (around $1.5 billion) from its wealth management division, its largest, having admitted to the year-long inquiry to charging customers for advice they never received and misleading regulators.

Hugh Dive, chief investment officer at Atlas Funds Management, which owns Macquarie shares, said AMP’s fund management arm might be an attractive target but “there’s a big chunk of something that’s a big mess”.

“There’s a price for everything but you would have to think how much of management’s attention is this going to take,” he said.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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