NYSE-listed Ares Management Corp proposes to acquire AMP

  • October 30, 2020 03:53 PM AEDT
  • Team Kalkine
NYSE-listed Ares Management Corp proposes to acquire AMP

Summary

  • AMP has received a non-binding proposal from Ares Management Corporation.
  • AMP has not disclosed the transaction value and is assessing the request. 
  • In September, AMP started portfolio review after enquiries for its assets increased over the recent past
Gold MTF non-AMP

AMP Limited (ASX:AMP) has received an acquisition proposal from Ares Management Corporation. The company’s shares skyrocketed after the news was announced by the company in an exchange notification.

The proposal is indicative and non-binding and is in the preliminary stage with no guarantee of completion. AMP has not revealed the transaction price and other details.

AMP noted that it continues to progress its Portfolio Review, which was announced early last month. The company has received significant interest in its assets and business. It is assessing the proposals while also pursuing a three-year transformation strategy.

Over the past few years, AMP shares have proved to be a great wealth destroyer for investors since Haynes Royal Commission exposed the several unethical practices in the company.

AMP had been accused of a range of wrongdoings, including charging fees for no advice, misleading regulators, and charging fees from accounts of deceased persons.

These incidents had led to a complete overhaul of its leadership over the recent years and is now led by new people seeking to deliver on the transformational strategy.

AMP was amidst controversy in recent months after an employee complaint was not handled properly by the top brass of the company. As a result, Chairman of the company stepped down, and Debra Hazelton was appointed as Chairwomen. 

Portfolio Review 

In early September, the company announced that Credit Suisse, Goldman Sachs, and King & Wood Mallesons were appointed as advisors for the portfolio review. 

Board remains committed to delivering transformational strategy and long-term value for shareholders. Over the recent past, the company has completed the sale of life insurance business and is making progress in strategy. 

The strategy includes reviving its wealth management business in Australia and growing asset management business. The management is also targeting a lean and simple business model for the company. 

AMP had been receiving significant interest for its assets over the recent past. As a result, the Board decided to pursue a portfolio review to assess all opportunities and the expected impact on shareholder value.

Q3 Update

In Q3 2020, Australian wealth management average AUM improved 2% to A$122.1 billion sequentially. This was driven by stronger market movement, which was offset by net outflows. Net cash outflows for the quarter were A$1.95 billion. 

AMP Bank ended the quarter with deposits of A$17 billion, and loan book saw a decline of 1.4% to A$20.6 billion. AMP Capital’s average AUM at the end of the quarter was A$189.8 billion against A$191.9 billion in the previous quarter. 

In New Zealand, the wealth management AUM increased by 1.2% to A$11.8 billion compared to A$11.6 billion in the previous quarter. Net cash outflows were limited to A$13 million compared to A$79 million in the previous quarter. 

AMP shares were trading at A$1.537 at 3:17 PM AEST on 30 October 2020, up by 20.117% from the previous close.  

 

 


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