AMP shares enjoyed their best day for months yesterday after it sold the remaining part of its asset management business to a New York investment firm in a deal worth at least $462 million.
The sale came a day after it sold local infrastructure assets to Dexus for at least $250 million, and possibly more once talks on other stakes are completed and a workout period completed to measure the performance of funds under management.
The shares, which eased 0.9% after the Dexus sale on Wednesday, rose sharply on Thursday after the second bit of news, climbing to a 2022 high of $1.18 and ending up more than 13.1% at $1.16, a closing high for the year to date.
It’s not easy to see why the shares rose after the company said shareholders would see a benefit with the company intending to return a significant portion of the proceeds from the recent sales to shareholders through capital return and on-market share buybacks.
AMP announced Thursday that the international infrastructure equity component of AMP’s asset management business, formerly AMP Capital but rebranded to Collimate Capital this year, has been sold to a subsidiary of DigitalBridge Group, a NYSE-listed infrastructure investment firm.
AMP said the deal with the US investor included an upfront consideration of $462 million and total value of up to $699 million.
AMP said Collimate was valued between $2 billion-$2.5 billion after Dexus bought its domestic infrastructure equity business as well as the sale in February of its infrastructure debt platform.
As part of the latest deal, DigitalBridge has bought $9 billion in assets under management, the related management platform and a “substantial portion” of the teams located across the UK and Europe, North America and Asia.
AMP chair Debra Hazelton said the transactions represent a “strong outcome for AMP shareholders and Collimate Capital stakeholders”.
“It was clear in our 2021 portfolio review that we had two businesses that would be better separated and simplified and in doing so realise greater value and that is what we have achieved.
“AMP and Collimate Capital have built outstanding private markets businesses in infrastructure and real estate over many years. In selling these businesses to such respected specialists in DigitalBridge and Dexus, we are confident that the businesses’ clients and the talented teams transferring with them will benefit.”
AMP chief executive Alexis George said it was an “important moment” for AMP shareholders, clients and staff. “In DigitalBridge and Dexus we are confident we have found the right owners for both businesses,” she said.
“They are focused on delivering strong returns for Collimate Capital’s clients and opportunities for our people. We expect both will add significant value through their scale, capability and depth of talent, which our teams will complement.”
Now hopefully AMP’s board and management will be able to explain to shareholders what they can expect from the company so far as earnings and revenue growth are concerned – that’s beside the forthcoming capital management.
Once that’s done, it wouldn’t surprise if many shareholders bolt with the money and don’t stay behind.
