Well, the AMP and its French bid partner, AXA, have blinked and added an extra $1.3 billion to the value of their joint bid for AXA Asia Pacific Holdings.
The increase is all cash.
And in doing so, they’ve imposed a deadline of next MOnday for an answer, otherwise they will walk away.
The increase lifted the value of the offer to a $12.9 billion bid, but the move brought little initial movement with the target company refusing to provide an immediate endorsement for the higher offer.
The deal is still aimed at carving up AXA APH’s Australian and Asian assets.
The additional $1.3 billion in cash and shares on the table compared to its original offer, lifts the offer price to $6.22 or thereabouts.
Under the revised proposal, the offer will still consist of 0.6896 AMP shares for each AXA APH share and a fixed cash component of $1.92, up from $1.38 in the first offer last month.
The market only took the shares up to a high of $6.01 before they eased to a day’s low of $5.68. AXA shares closed at $5.72, down 10 cents.
The AMP’s were steady on $6.23.
It was hardly a ringing endorsement from investors of the higher price.
That first offer was rejected by a committee of independent directors on November 9, 2009 and yesterday AXA APH chairman Rick Allert said in a statement the independent board committee intended to take appropriate time to carefully consider the revised proposal and would provide an update to the market when the assessment is completed.
"The independent board committee will take the appropriate time to carefully consider the revised proposal and we will update our shareholders and the market when this assessment has been completed," Mr Allert said in the statement to Australian Securities Exchange yesterday.
"The Revised Proposal has increased the cash component of the proposal by 54 cents per share and leaves the scrip component unchanged.
"This implies an offer price of A$6.22 per AXA APH share, based on the volume weighted average AMP share price of A$6.24 since the announcement of the initial offer and compares to the implied value of the Initial Proposal of A$5.34 per AXA APH share based on the AMP share price of A$5.75 per share on 5 November 2009, and A$5.68 per AXA APH share based on an AMP share price of A$6.24.
"AXA APH has an enviable position in Asia delivering strong growth and an Australian and New Zealand business that is well positioned to take advantage of the recovery in markets and to respond to the anticipated future regulatory changes."
AXA APH said shareholders "do not need to take any action in relation to the revised proposal".
"The offer is conditional on completion of extensive due diligence, the unanimous support of the independent board committee, execution of the agreements to implement the transaction and a range of other important conditions," the company said.
"AMP and AXA SA have stated that the revised proposal will lapse if binding transaction documents are not entered into prior to the close of business on 21 December 2009.
"AMP and AXA SA have advised that this price represents their best and final proposal."
The Paris-based AXA SA is AXA APH’s French-based parent.
"The revised proposal represents an ungeared value of $4,413 million for AXA APH’s Australian and New Zealand business and $9,626 million for AXA APH’s Asian business," the company said.
The December 21 offer and the use of the words "best and final proposal" means the offer won’t be increased and will end next Monday, so it’s now a game of pressure on the AXA APH’s independent board directors.
But if the bid fails, the local company knows that either the parent and AMP will come back, or an Australian bank will make a higher value play.
