3RD UPDATE: AXA Asia Pacific Board Split On AMP Bid
November 16 2010 - 1:25AM
Dow Jones News
The A$13 billion bid for AXA Asia Pacific Holdings Ltd. (AXA.AU)
hit a possible stumbling block Tuesday when the target's board
failed to reach a unanimous agreement on the offer.
AXA Asia Pacific said five of its six independent directors have
decided to recommend the bid from its 54% owner AXA SA (AXAHY) and
AMP Ltd. (AMP.AU) in the absence of a superior offer and subject to
an independent assessment.
One of the directors is seeking further information before
deciding whether to back the proposal, potentially further
extending the takeover chase that has been underway for more than a
year. The bid is conditional on unanimous approval from the
independent directors.
AXA SA is "quite happy for the remaining director to get
whatever information it is he or she needs," an external spokesman
for the French insurer said.
"They have been patient so far," he said.
AMP and France's AXA SA first launched a bid for the Australian
unit in November last year. The French insurer later teamed up with
NAB to make a higher offer that won over the target's board but was
blocked by the competition regulator.
Investors remain hopeful the latest takeover plan will
eventually go ahead. AXA APH shares rose 1.3% Tuesday to close at
A$6.25.
"Given five of the six (independent directors) have said yes,
I'd be surprised if it doesn't go through," said Peter Vann, head
of research at Constellation Capital Management. "If the sixth has
a valid concern, then the other five probably wouldn't have gone
the way they did."
Despite the one board member abstaining, the parties continue to
lay the groundwork for a possible deal. AMP expects to begin due
diligence on AXA APH this week, a person familiar with the
situation said.
AMP plans to keep the Australian and New Zealand assets of AXA
APH and sell the Asian business to AXA SA.
The deal is crucial to the French company's global strategy of
increasing exposure to developing markets.
Under the proposal, AXA APH minority shareholders would receive
AMP shares and cash worth at least A$6.43 for each AXA APH share,
subject to the movement of the AMP share price within a certain
band.
AXA APH Chairman Rick Allert is among the directors who support
the offer.
"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," Allert said in a statement.
"As a result, we believe the proposal is in the best interests
of AXA APH minority shareholders," he said.
If all the independent directors agree to back the proposal, it
can then be put to a vote by AXA Asia Pacific minority
shareholders. It also requires approval by Australian Treasurer
Wayne Swan.
AMP welcomed the decision by the five directors to support the
bid.
"We understand that one director is seeking further
information," said an AMP spokeswoman. "We'll respect this and
we'll wait to see what the director decides."
AXA APH said the offer represents a 50% premium to the A$4.30
closing share price of the target on Nov. 6, 2009, the last trading
day prior to the announcement of the initial proposal from AMP and
AXA SA.
Asked if the suitors would consider waiving the requirement for
a unanimous board decision, the AXA SA spokesman said: "That's not
a matter for today."
"For today, the thing is to allow time for the independent
directors to possibly come to a unanimous view," he said.
-By Rebecca Thurlow, Dow Jones Newswires; 61-2-8272-4679;
rebecca.thurlow@dowjones.com
(Cynthia Koons in Sydney contributed to this article.)
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