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Australia’s embattled AMP receives a buyout offer from Ares Management

Author : Pankaj Singh | Published Date : 2020-11-03 

AMP Ltd., a renowned Australian wealth manager, has reportedly announced that it has received a conditional buyout offer from Ares Management Corp, a US based alternative investment management company, which values it at $4.47 billion (A$6.36 billion). This buyout offer led to a jump in the Australian company’s share price.

Shares of AMP, which is contemplating a potential break-up or sale after going through a series of scandals, jumped 9.8% on Monday to A$1.68 after it disclosed the amount Ares was offering for the purchase.

This rise in share price was the highest recorded since July 2020, but still less than Ares’ offer of A$1.85 per share, which remains the only buyout offer for the entire group yet, cited a source privy to the matter. This indicated that investors are seeing considerable uncertainty in the purchase agreement.

Other investors have been keen to buy separate parts of the firm, which has financial planning units, fund management, and banking under its belt, added the source.

Chief Investment Officer of US based investment firm Allan Gray, Simon Mawhinney, stated that the increase in share price was surprising. Allan Gray is the second largest shareholder of AMP.

Mawhinney further added that the company would apply its minds to any buyout offers for AMP in parts or whole when the purchase proposals are firmed up.

Ares Management’s indicative offer price shows a 21% premium to AMP’s A$1.53 closing price on Friday when shares value had already increased after the company disclosed the receipt of the Ares’ offer earlier that day.

Additionally, in a brief report, the Australian firm stated that negotiations were at a primary stage between Ares Management and itself. The firm also added that there is uncertainty on the deal being finalized on the given price.

Source credit: https://www.reuters.com/article/us-amp-m-a-ares-mgmt/australias-amp-says-ares-buyout-offer-values-it-at-4-5-billion-idUSKBN27H1S1

About Author

Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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