AMP may have delivered an eleventh-hour turnaround with the revelation that US private equity giant Ares is looking to buy 100 per cent of its business.
As far as updates go it was light on detail, and AMP was careful to stress discussions are “at a very preliminary stage” and that there is “no certainty that a transaction will eventuate”. But the news that US private equity player Ares has its eye on the beleaguered wealth/asset management giant sent its share price soaring some 20 per cent.
And Ares isn’t just interested in AMP Capital – the jewel in AMP’s crown, and the rare bright spot in its performance updates over the last several years – but the whole business. That includes the problem-child wealth arm, which is no stranger to post-RC controversy and has seen huge declines in adviser numbers.
Whether that business will be sold for parts after everything is signed (as is the way of most American private equity giants) remains up in the air. But AMP also used the update to say that it had seen “significant interest” in its businesses and assets (read: AMP Capital, North) and that it was assessing a range of options while continuing with chief executive Francesco De Ferrari’s three-year transformation strategy.
The offer is a rare bright spot for AMP and its shareholders, who have endured a year of outflows and high-profile harassment scandals that saw one executive kicked to the kerb and another demoted in a cloud of shame – not to mention the departure of chair David Murray and board member John Fraser. It could well be that new chair Debra Hazelton can lead AMP from the disaster that saw her appointed to the job.
But as the company itself notes, nothing is final. And if Ares should decide that the negatives of owning the wealth arm outweigh the benefits of owning AMP Capital, AMP’s long-suffering shareholders might not be at the end of the road.
November has seen the largest rise in investor confidence since June, according to State Street Global Markets, with the leap led by a chang...