$13B+ takeover bid for AXA APH hits potential hurdle, board split on decision
A multibillion-dollar takeover bid for AXA Asia Pacific (ASX: AXA) hit a potential hurdle on Tuesday when the Australian company's board failed to meet a key condition of unanimously backing the proposal.
Wealth manager AMP, together with AXA APH's French parent AXA SA, made a fresh offer to buy rival AXA APH on Monday, valuing the Melbourne company at $13.3 billion.
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 said Tuesday five of six of its independent directors will recommend AMP Ltd's takeover bid to shareholders in the absence of a superior takeover proposal and subject to the review of an independent expert.
One board member, however, requested additional information, potentially extending an already year-long deal.
Analysts say the dissent of one board member could be a stumbling block for the takeover proposal that is conditional on unanimous approval from the independent directors.
But the deal itself is not in danger according to Mark Daniels, head of equities at Aberdeen Asset Management.
"It just a matter of time. That one director wanted to sleep on the proposal for a couple of nights," he said.
A deal would put AMP at the top of Australia's $1.2 trillion wealth management market, the world's fourth largest, and end one of Asia's largest takeovers.
It would also allow AXA SA to exit Australia and help it to focus on its stated goal of growing in Asia, where it already has businesses in eight countries.
Investors were unperturbed and sent the shares of AMP and AXA Asia higher by more than 1 percent in early trade, adding on the sharp gains on Monday.
By 1021 AEDT, shares in AXA APH had lifted nine cents, or 1.46 per cent, to $6.26.
AMP's shares added six cents, or 1.1 per cent, at $5.51.
With Reuters