AMP ‘in play’ as US private equity lobs a takeover offer

The $4.4 billion AMP is likely to become the subject of a bidding war after US-based Ares Management Corporation made a conditional bid for the company.

Oct 30, 2020, updated Oct 30, 2020
An offer has been made for troubled wealth company AMP

An offer has been made for troubled wealth company AMP

The company’s shares soared 19 per cent to $1.54 at the opening of trade this morning as investors sensed the possibility of a bidding war. The jump in share price added $900 million to its market value, but has fallen back as the morning trade settled.

AMP has not disclosed the details of the offer but said the offer would be done through a scheme of arrangement and that there had been considerable interest in its business from other parties.

Speculation is that the offer would total about $5 billion. Morgan Stanley is understood to be working for Ares, a private equity firm based in California.

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

“AMP continues to progress its portfolio review annnounced on September 2.

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“AMP has received significant interest in its assets and businesses and is assessing a range of options in a considered and holistic manner, including to pursue its three-year transformation strategy with a focus on maximising shareholder value.”

The offer follows years of turmoil, scandal and underperformance at the company which peaked with evidence at the banking royal commission which found the company continued to charge superannuation customers who it knew to have died.

That was followed by news that it had promoted Boe Pahari to lead AMP Capital, despite previously being docked half a million dollars from his annual bonus after sexual harassment allegations and an investigation by the company found to be “lower-level breaches” of AMP’s code of conduct.

Ares has been given access to AMP’s data room.

AMP closed on Thursday at $1.28, down 2.5c a share.

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