AXA rejects takeover bid as stock falls
AXA Asia Pacific shares dropped 44 cents or 10 per cent in early trading this morning following an announcement the group had terminated talks with its French parent AXA SA over a proposed minority buyout deal.
An AXA Asia Pacific sub-committee of independent directors torpedoed the deal yesterday “as a difference remained outstanding on the issue of price”, and led the committee to opt against recommending the final offer from AXA SA, of $4.05 per share fully payable in cash, to shareholders.
AXA SA chief executive Henri De Castries, in a letter to AXA Asia Pacific chairman Rick Allert dated October 15, said “this increased price represents a premium of approximately 25.5 per cent over the closing AXA share price on August 5 (when the proposal was announced)”.
However Allert said the final offer price was below the level the committee were prepared to recommend to shareholders and allow the French arm to acquire the 48.4 per cent of AXA Asia Pacific stock it does not own.
“At AXA SA’s final price of $4.05, the independent directors are unanimous that AXA SA’s proposal is insufficient for them to propose a scheme of arrangement or to make a recommendation that shareholders vote for it,” Allert said.
The proposed minority buyout, which had seen AXA Asia Pacific’s share price spike at $4.10 ahead of an anticipated deal and before today’s price tumble, had initially been for AXA SA to pay $3.75 in a 50/50 cash and scrip deal.
However this was amended to a $4.05 pure cash offer.
De Castries, in his correspondence to Allert, requested a final decision on the proposal by 5pm Paris-time this Friday, however this is now academic as AXA Asia Pacific rejected the offer yesterday ahead of notifying the Australian Stock Exchange this morning that talks between the parties had ended.
AXA shares dropped 44 cents in early trading this morning, hitting a low of $3.66 before rallying slightly to $3.76 at midday.
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