AXA Asia pacific rejects AMP’s bid

The offer - which is backed by AXA SA, AXA AP's parent company and largest shareholder - would see AMP acquiring 100% of AXA AP and merge the Australian and New Zealand businesses with its own operations.

AXA SA would then buy 100% of AXA AP's Asian business.

AMP said in a presentation to investors the combined business would have A$142bn of assets under management and it would consolidate its leading position in the pension markets of both Australia and New Zealand.

AXA AP chairman Rick Allert said: "The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability. The non-financial terms of the proposal also imposed excessive uncertainty and risk on AXA AP's minority shareholders."

AMP said under the terms of the proposal, AXA AP investors would be offered 0.6896 AMP shares for each AXA AP share plus A$1.38 in cash. It added this represented a 31% premium based on the closing price of both companies on November 5.

The offer also states the cash component of the offer would increase with the appreciation of the US dollar relative to the Australian dollar, while it would be protected against a fall of the US dollar in excess of 5%.

In contrast, AXA AP said in a statement the value of the offer was uncertain and varied with movement in AMP share price and the exchange rate between the Australian dollar and the US dollar.

It said: "Based on the closing AMP share price and the Australian dollar / US dollar exchange rate on Thursday November 5 2009, being the date cited in the proposal, the implied value of the offer to AXA AP minority shareholders was approximately A$5.34 per AXA AP share, or A$5.17 per AXA AP share assuming the minimum cash component."