AMP stock climbs on NAB takeover talks

AMPshares rose more than 25 per cent today to highs of $6.52 after National Australia Bank’s purchase of 34.3 million shares hinted to the market that the National is poised to launch an acquisitive raid on the reeling financial giant.

Investors were buoyed by the comments of NAB chief executive officer, Frank Cicutto, who indicated the group may consider acquiring AMP in a post de-merger environment.

“The National has no interest in acquiring AMP while AMP owns its UK business…we await the detailed information to be provided in AMP’s de-merger documents,” Cicutto says.

The stock purchase by National, which it says is a strategic move, takes its stake in AMP to 5.43 per cent. NAB had been hoping to raise its stake to 11 per cent after offering a number of fund managers $6 a share - a significant mark-up on yesterday’s close of $5.15.

However it appears the market is anticipating a possible run on AMP’s stock value given today’s upswing and the fact many investors opted to hold onto their investments.

Although comments today by the Federal Treasurer, Peter Costello suggest the government may intervene and veto any acquisition bid for AMP if it is “in the national interest”.

“The Treasurer has the power to approve or not approve a shareholding in AMP once it reaches 15 per cent… when it reaches 15 per cent an application will be made and will be considered in the national interest,” Costello says.

Earlier in the week, AMP announced Henderson Global Investors would roll the lions share of its $3 billion of international active equities into the AMP/Mercer Future Directions Fund before the end of the year.

Close to $900 million will be rolled into the Henderson Global Investors Enhanced Index Fund while the remaining assets will be allocated across five active managers —Dresdner RCM Global Investors, Wellington International Management, Grantham Mayo Van Otterloo (GMO), Alliance Capital and Bernstein.