So what will the board of AXA Asia Pacific and its French parent, AXA SA, now do?
The preferred bidder for AXA Asia, the National Australia Bank, has been blocked from bidding with its $14.1 billion offer, but the spurned suitor (and cheaper in price), the AMP (with a value of $13.1 billion), has been cleared.
The AXA Asia board can sit there and do nothing, they can reject the AMP once again and pledge to go it alone, or they can engage with the AMP and try and get a higher price.
Certainly the AMP loved the ACCC decision, which came well after trading had finished yesterday afternoon.
The decision confirmed the Commission’s initial doubts about the NAB offer, that it would limit future competition in an important area of financial services and funds management.
NAB said it wouldn’t comment until it had studied the decision.
The AXA board said "AXA APH has not yet had the opportunity to evaluate the ACCC decision and the reasons for it and will do so over the coming period.
"NAB can enter into further discussions with the ACCC about the Proposal. Under the terms of the executed transaction agreements, if NAB is not able to reach a satisfactory conclusion with the ACCC within six weeks, each of AXA APH, AXA SA or NAB can terminate the agreements between them in relation to the Proposal.
AMP CEO, Craig Dunn loved the decision (naturally) and said a merger of AMP and AXA AP’s Australian and NZ operations would see the creation of a fifth pillar in the critically important financial services sector.
“We have always believed that a combined AMP-AXA AP group would provide an even stronger, non-bank competitor in financial services that Australian consumers deserve,” said Mr Dunn.
AMP continues to believe it can put forward a proposal that is financially disciplined and will create value for its shareholders, and which the independent directors of AXA AP will be able to recommend to their minority shareholders.
And it was no wonder Mr Dunn was happy, the ACCC found the AMP wasn’t so well placed in the area of wrap accounts and platforms, hence its now lapsed bid was clear to go.
Mr Dunn would have noticed that in the short statement from AXA Asia last night, the AMP wasn’t mentioned, only the NAB.
The ACCC announcement read:
"The Australian Competition and Consumer Commission has today decided to oppose National Australia Bank Ltd’s (NAB) proposed acquisition of AXA Asia Pacific Holdings (AXA), and not to oppose AMP Limited’s (AMP) proposed acquisition.
"At the heart of the ACCC’s decisions are concerns about innovation, and as a consequence future rigorous and effective competition between retail investment platforms," ACCC chairman Graeme Samuel said today.
"The ACCC has extensively investigated both proposals over the past four months and received information from a wide range of sources, including fund managers, financial advisers and other market participants, as well as various industry research reports.
"In addition, the ACCC scrutinised a substantial number of internal company documents from the merger parties and their competitors.
"The ACCC reviewed competition effects across a range of markets including superannuation, insurance and banking, and following extensive investigation, the ACCC did not identify any competition concerns with respect to these markets.
"The key focus however, was retail investment platforms which provide a central hub for investors to access a range of investment products, and allow for consolidation of client information and reporting on these assets.
"The ACCC found that a merger between NAB and AXA would result in a substantial lessening of competition in the market for retail investment platforms for investors with complex investment needs.
"However, the ACCC found that an independent AXA or a merger between AMP and AXA would not have this effect.
"The ACCC found that NAB is a significant competitor in the provision of retail investment platforms for investors with complex needs.
"The ACCC also found that AXA is on the cusp of delivering an innovative platform that is likely to provide aggressive competition for investors with complex investment requirements.
"As a result, the ACCC considered that a merger of NAB and AXA would remove competitive tension.
"By contrast, the ACCC found that AMP was not a significant competitor for retail investment platforms for investors with complex investment needs.
"The ACCC concluded that because AMP does not own its own wrap platform it is constrained in its ability to compete aggressively," Mr Samuel said."
AXA Asia shares eased 3c to $6.34, the AMP’s shares fell 6c to $6.40 and the NAB’s shares dropped 29c to $28.08 off the back of concerns about the fraud charges against Goldman Sachs.
