US investment manager bids for AMP Limited

AMP has announced that it has received an indicative, non-binding conditional proposal from US-based global investment management firm Ares Management Corp to acquire 100 per cent of AMP Ltd shares by way of scheme of arrangement.

In an announcement to the ASX, AMP has noted that the discussions for the proposal are at a very preliminary stage, with no guarantee at this point that it would result in a transaction.

Commenting on the proposal, AMP said: “AMP continues to progress its portfolio review announced on 2 September 2020.”

“AMP has received significant interest in its assets and businesses and is assessing a range of options in a considered and holistic manner, including continuing to pursue its three-year transformation strategy, with a focus on maximising value.”

AMP has announced that it has received an indicative, non-binding conditional proposal from US-based investment management firm Ares Management Corp to acquire 100 per cent of AMP Ltd shares by way of scheme of arrangement.

The receipt of the proposal from Ares Management has followed the embattled wealth management group’s announcement in September that its board would undertake a portfolio review of the group’s assets and businesses.

In that announcement, AMP said that (as updated in its results for the first half of 2020), following the sale of AMP Life, it would be growing its asset management franchise, including a “repivot” to private markets and “refocusing public markets”, and “creating a simpler, leaner business”.

“However, AMP periodically receives unsolicited interest in its assets and businesses, and recently has experienced an increase in interest and enquiries,” AMP said.

“The board has therefore decided to undertake a portfolio review to assess all opportunities in a considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value.

At the time, AMP had reiterated that the review could conclude that AMP’s current mix of assets and businesses is appropriate for shareholders and may not result in a recommendation to pursue a specific transaction.

Speaking of the portfolio review, AMP chair Debra Hazelton said: “The board believes that AMP has high-quality businesses with significant strategic value.

“The board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital, and are confident that this will deliver long-term value for shareholders.

“However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”

[Related: AMP Bank earnings sink 30%]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.