Analysts are mixed over whether National Australia Bank (NAB) would give up on its bid for Axa Asia-Pacific’s Australian and New Zealand assets after the $13.3 billion takeover was blocked a second time by the competition regulator.
CMC Markets analyst David Taylor said although its possible NAB could try and appeal the Australian Competition and Consumer Commission’s (ACCC) decision in the courts, there would come a point where the costs of pursing the deal would outweigh the benefits.
“The shareholder response [yesterday] would indicate that investors want this transaction put to bed,” Taylor said.
“The ACCC’s job is to act as an independent authority with respect to competition laws. It’s their view that NAB’s bid for Axa is anti-competitive and should not proceed.
“That should be respected.”
Lincoln Indicators equities analyst Michael Feller said NAB would likely walk away from the deal, rather than chase it through the courts.
“Politically speaking, a bigger NAB in Australia is never going to be popular. It will be much easier for NAB to find better targets and more open regulators overseas,” he said.
But he said AMP, which last month said Axa remained “strategically attractive on the right terms”, was unlikely to restate its bid.
“I think AMP is pleased that NAB’s been blocked, but they’re unlikely to restate their bid at this time. Axa is just too expensive at current levels,” Feller said.
The ACCC yesterday maintained its opposition to NAB acquiring Axa, even after NAB offered to divest Axa’s North platform to IOOF Holdings to appease the regulator.
“The proposed undertakings offered by the parties do not provide sufficient certainty that the ACCC’s competition concerns will be addressed,” ACCC deputy chairman Peter Kell said.
“The ACCC issued its decision to oppose the proposed acquisition of Axa by NAB in April this year, and remains opposed because it would be likely to result in a substantial lessening of competition in the relevant retail investment platform market.”
NAB said that it was considering the implications of the ACCC decision and would provide an update as soon as possible.
