AMP has failed to secure a binding agreement with US investment firm Ares for the second time in six months, amid growing speculation over the leadership of the wealth giant.
AMP signed a non-binding agreement in February to carve out AMP Capital’s private markets business and sell 60 per cent to Ares for $1.35 billion. Now, this offer has lapsed and while AMP has said negotiations are ongoing, the door is once again open for new suitors to step forward.
AMP chief Francesco De Ferrari. The wealth giant says there is ‘no certainty’ deal with Ares will proceed. Credit:Dominic Lorrimer
A media report published last Thursday claimed chief executive Francesco De Ferrari would resign immediately. The report forced AMP to concede the board was negotiating the group’s leadership which would be determined once the portfolio review was concluded.
The latest agreement with Ares included a 30-day exclusivity period, which ended on Sunday, at which time a binding agreement could be signed and the portfolio review would be concluded.
AMP on Monday released a statement that made clear no binding agreement with Ares had been signed, meaning there would be no immediate change to AMP’s leadership.
“AMP and Ares continue to work towards a potential transaction and Ares has expressed interest in acquiring 100 per cent of the private markets businesses,” it said.
“There is no certainty that a transaction will proceed, or the terms, size or structure on which it would proceed. Any transaction would remain subject to approval of AMP shareholders.”
AMP launched the portfolio review last September after it claimed to have received unsolicited offers to buy parts of the company. However, more than six months later, only one party has emerged – Ares – and this is the second deal that has now fallen over.
Ares offered to acquire 100 per cent of AMP’s shares in October, which sent the group’s stock price soaring by almost 20 per cent. This bid was subsequently retracted after Ares completed its due diligence.
The past 12 months have been bruising for AMP, after an investor revolt over the botched handling of a sexual harassment complaint led to the resignations of chair David Murray and director John Fraser.
The Ares update came after another ASX filing where AMP said it had agreed to end the management agreement of a New Zealand-based listed real estate investment trust (REIT) for $197 million.
AMP Capital said it would get about $80 million in profit from the deal.
More to come
Charlotte is a reporter for The Age.
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