AMP will likely withdraw its $31 million cash offer for MacarthurCook following a profit slump.
After posting a slump in interim earnings, AMP is likely to withdraw its offer for property funds manager MacarthurCook, according to AMP chief executive officer Craig Dunn.
"In difficult market conditions like these we have a clear bias, a very strong bias to holding more capital than less," he said.
"We are currently evaluating options to raise tier two capital, or subordinated debt, potentially with an issue in the second-half of this year.
"While we remain optimistic over the medium-term there is no doubt that the immediate future continues to be very challenging."
AMP wanted to buy MacarthurCook because it would boost the firm's Asian expansion strategy, and had offered to buy the Melbourne-based fund manager for $31 million cash on June 10.
On Wednesday, the deal had become a poison pill after IOOF Holdings was given permission to buy a 13 per cent stake in MacarthurCook.
"Our position has not changed and barring capacity to access or undertake due diligence on MacarthurCook, we are likely to move on and leave that proposal behind." Dunn said.
Dunn did not make it clear whether AMP had the financial strength to buy other direct property managers.
AMP posted a net profit of $366 million for the six months to June 30, a 22 per cent fall from the prior comparative period.
AMP's income has been hurt by tumbling stock markets, plummeting financial planning cash flows and declining assets under management (AUM).
In Part 2 of our exclusive series, we ask leading names to nominate their best investments, the most effective industry group and the importance of platforms.
Since last month's issue, newspaper headlines have continued to scream out doom and gloom about the current markets, among them "Super losses", "Savage write-offs" and "More bad news".... read more »
Home delivered!
Daily news, weekday mornings
Get the day's news delivered direct to your inbox. Register here (it's free!) and choose 'yes' to receive the InvestorDaily newsletter.
Catholics revamp fixed interest »
Industry superannuation fund the Catholic Superannuation and Retirement Fund (CSRF) has revamped its fixed income portfolio.
Mercer backs alternatives »
Mercer has awarded $34.15 million in mandates to Tactical Global Management (TGM) and Lazard Asset Management to invest in alternative assets.
It is a belief of some planners that ASIC lost the opportunity to make inroads into the licensing of planners eight to 10 years ago when it was just getting on its feet.... read more »
