AMP in no hurry to up bid, says analyst
AMP is in no rush to up its bid for AXA Asia Pacific, according to a Credit Suisse analyst.
Arjan van Veen said not only has AMP’s internal growth remained strong, but much hinged on the Australian Competition and Consumer Commission’s (ACCC's) decision with regards to NAB’s bid on March 18.
AMP’s exclusivity agreement with AXA SA falls away tomorrow.
“All AXA SA is going to do is start talking to both parties, and that means that there is no rush for AMP to do anything,” Van Veen said. “Also, NAB is going to have to go through all the regulatory hurdles — why would AMP make a higher bid today and find out on March 18 that the ACCC has decided to knock back the NAB bid? You would have made a higher bid for no reason.”
He added that unless AXA decides to go ahead and finalise a deal with NAB, there’s no reason why AMP has to rush.
“It’s just another day.”
Van Veen said the main concern for AMP is that the NAB bid is all cash, and this is one area AMP will struggle to match. However, AMP does not necessarily need AXA Asia Pacific’s Australian and New Zealand business, as it is seeing significant growth and therefore the AXA Asia Pacific deal is not a strategic imperative.
“AMP is doing quite nicely the way it is,” said Van Veen, adding that AXA Asia Pacific was a nice opportunity that AMP tried to take advantage of, but doesn’t necessarily need.
But should NAB prove successful with its bid, Van Veen agreed that Perpetual is another possibility for AMP as it goes some way to addressing some of the strategic gains AXA Asia Pacific would have given them.
“You have to look at why AXA Asia Pacific is attractive. What AMP wants is access to third party platforms and to third party insurance, and that’s what AXA Asia Pacific gives them,” he said. “Perpetual would give them a third party brand and it does have wealth focus with the platform, although it’s not a very big one.”
On the life insurance side, Van Veen referred to other possibilities for growth being Suncorp Life, Asteron or Tower Australia.
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