AMP addresses split personality with UK separation
Trading inAMP Limitedstocks was suspended today following the announcement of a de-merger which would result in the Australasian operations being distanced from the group’s poorer performing northern hemisphere operations.
The Australian-based company will retain the AMP name while its UK-based arm will be branded Henderson.
AMP executives were unavailable this morning to comment on whether the initiative, the culmination of a review commenced six months ago by new chief executive Andrew Mohl, was the first move towards selling off business units that were no longer strategically compatible or under performing.
AMP chairman Peter Wilcox did however say in a statement to theAustralian Stock Exchangethat “one of the key findings of the strategic review was that there was no longer a compelling reason to keep AMP’s current mix of businesses together, but powerful reasons to separate them”.
According to Mohl the two companies will have simpler, more transparent corporate structures, with different business strategies, risk profiles, customer bases and growth prospects.
The de-merger, predominantly relating to the UK Life Services business, will involve $2.6 billion in writedowns, however the group will undertake a $1.5 billion capital raising, comprising a $1 billion institutional placement and a $500 million Share Purchase Plan for Australian and New Zealand retail investors.
Mohl said until the proposal was put to shareholders and when the de-merger was complete, AMP would continue to be managed as one company.
“While the proposed changes are complex, our strategic review has culminated in an initiative that will return AMP in Australasia to its roots, and provide the UK-based company with a more logical set of assets and the ability to focus on its already strong asset management business,” Mohl said.
AMP is being advised on the de-merger by Caliburn Partnership andUBS Warburg, and expects trading in its share to recommence on Monday.
Recommended for you
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
CoreData has shared the top areas of demand for cryptocurrency advice but finds investors are seeking advisers who actively invest in the asset themselves.
With regulators ‘raising the bar’ on retirement planning, Lonsec Research and Ratings has urged advisers to place greater focus on sequencing and longevity risk as they navigate clients through the shifting landscape.
