All over bar the shouting now for the AMP bid for AXA Asia Pacific, aided by AXA SA?
AMP’s hopes of landing AXA APH rose yesterday when a majority (five of six) independent directors of the target company gave the offer the greenlight.
The 6th independent has withheld an opinion after asking for more information.
The five who said yes include chairman Rick Allert who helped rebuff AMP’s last two attempts.
AXA APH shares rose 8c, or 1.3%, to $6.25. But the AMP’s shares ended down 19c at $5.26, a fall of 3.5%, after earlier jumping 1.1% to $5.51 in the wake of the positive news from AXA APH.
It seems news of the one hold out director contributed to the turnaround.
Mr Allert, who extracted a benchmark $6.43-a-share offer from National Australia Bank to thwart AMP’s last move on his company only to see the competition regulator block the bank’s agreed merger, said that the latest proposal was in the best interests of AXA’s minority shareholders.
Mr Allert, commented, "AXA APH’s Independent Directors Committee has carefully and thoroughly examined the value and terms of the revised Proposal from AMP and AXA SA," according to the statement to the ASX.
"A majority of the Independent Directors believe AMP and AXA SA’s Proposal provides minority shareholders with appropriate value for their investment in AXA APH, supported by significant downside protection. As a result, we believe the Proposal is in the best interests of AXA APH minority shareholders."
AXA SA currently owns 53% of AXA APH and will pay $10.6 billion to buy AXA AP’s Asian businesses once the deal goes through.
That is $800 million more than what it had agreed to contribute when the French company had previously teamed up with NAB and before that AMP when it put AXA AP into play last year.
AXA AP refused to disclose the name of the independent director who has yet to make up their mind about AMP’s offer. Including Mr Allert, the other independent board members are Patricia Akopiantz, Michael Butler, Paul Cooper, Tony Froggatt and Peter Sullivan.
In their statement the five independent directors said the $6.43 a share offer from AMP represented a 50% premium to the last closing price of AXA AP’s shares at $4.30 before the new bid was put to the board last week.
The AMP offer requires all of the directors to unanimously support the deal and the remaining independent director was seeking further information “before determining their position on the proposal”, according to the statement yesterday.
If the remaining director agrees, the offer can then be put to AXA APH’s minority shareholders.
If not, then it doesn’t necessarily fail because the AMP can waive that condition of its bid.
The quick approval of the new AMP bid by five of the six independent directors does however suggest that the one hold out might actually oppose the offer completely, not just conditionally.
If it were simply a matter of gathering a few extra facts or conducting a bit more analysis in order to present a unanimous position on the bid, we would have expected further discussions between the independents before a statement was issued.
That the statement appeared so quickly indicates five strongly support the bid and one doesn’t.
The question now remains that if that hold out rejects the bid and goes public, could they rally shareholders to reject the AMP offer?
