Private Equity Kickstarts Bidding War For Battered AMP

Struggling wealth giant AMP has confirmed that it has received a takeover proposal from an American private equity firm to acquire 100%, a move that will put the group into play.

The offer comes two months after it put parts of the company up for sale in the wake of a board and management shakeout.

AMP told the market on Friday morning it had received an indicative, non-binding, conditional proposal from US private equity operator Ares Management Corporation to buy the company, but said no decision had been made.

It didn’t provide any details on the pricing of the proposal which is a deficiency the company should repair ASAP. the announcement was made after media reports appeared early this morning naming the ‘bidder’.

Those media reports gave a value of $5 billion but that seems to be pie in the sky stuff.

At Thursday’s price of $1.28 a share the company is valued at $4.39 billion. A price of $5 billion would be a modest 15% or so increase on that closing price which seems skinny at best.

“AMP notes discussions on the proposal are at a very preliminary stage and there is no certainty that a transaction will eventuate,” it said.

The statement said AMP would also consider “continuing to pursue its three-year strategy, with a focus on maximising shareholder value”.

The mooted approach seems to be a tyre kicking attempt to try and get due diligence rights. The ASX should really suspend the shares until a pricing details of the offer appear.

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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