Ares has valued AMP at $1.85 a share, or approximately $6 billion, as it forges ahead with a proposal to buy 100 per cent of the beleaguered wealth/asset management giant. At the time of writing, AMP shares were trading at $1.65.
“Any potential transaction would be subject to a variety of conditions and structural considerations, including extensive due diligence, evaluation of divestiture of certain assets or non-core businesses, and may involve third-party co-bidders,” Ares said in filings with the SEC.
“The diligence and discussions are very preliminary and there is no certainty that any transaction will occur on the proposed terms, within any particular time frame, or at all.”
While a number of potential buyers are apparently circling AMP, Ares’ offer is the first that has been significant enough to warrant informing the market and shareholders. The focus remains on crown jewel AMP Capital, with opinions on the worth of the other business units – including the wealth arm and AMP Bank – remaining mixed.
AMP isn’t rushing into the deal, using its announcement to stress that nothing was final.
“AMP emphasises the preliminary nature of the proposal and the discussions between itself and Ares, and that there is no guarantee that a transaction will eventuate and no certainty with regards to price,” AMP said.
I think there should be a purchase agreement made and then at the the time of the sale Ares tell AMP that things have changed and they will now need to accept at least a 40% reduction in the sale price. Surely AMP could not dispute that this is a legal, moral and ethical way to handle such transactions.
Will be funny if the wealth arm gets divested at the same price CBA sold its wealth arm to CountPlus: $3 million minus $400k per adviser in indemnity.