Friday, 4 Dec 2020

Australia's AMP buyout offer from Ares Management valued at $4.5 billion

FILE PHOTO: The logo of Australia’s biggest wealth manager, AMP Ltd, adorns their head office building in Sydney, Australia, October 28, 2016. REUTERS/David Gray

(Reuters) – Embattled Australian wealth manager AMP Ltd AMP.AX on Monday said a buyout offer from U.S.-based Ares Management Corp ARES.N had an implied value of A$1.85 per share, valuing the proposal at A$6.36 billion ($4.47 billion).

The offer price represents a premium of 21% to AMP’s closing price of A$1.53 on Friday, when shares had already surged after AMP announced the receipt of the offer earlier in the day.

In a brief update, the Sydney-based company said talks were at a preliminary stage between itself and Ares, and there was no certainty with regards to the price.

Ares’ offer comes at a time when AMP’s shares have lost more than two-thirds of their value since a public inquiry in 2018 exposed systemic wrongdoing at the company including charging fees for advice that was never given, taking insurance premiums from the accounts of dead clients, and misleading a regulator.

Earlier this year, AMP ceded its position as Australia’s largest wealth manager to IOOF Holdings Ltd IFL.AX after its rival bought National Australia Bank Ltd’s NAB.AX financial advisory arm.

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