Testing split option
AMP commits to transformation
SHARES in embattled wealth manager AMP rallied almost 5 per cent after it revealed plans for a strategic review that could potentially lead to the break-up of the business.
The wealth manager said following an increase in inquiries it would review its assets and businesses, but this might not result in any deals.
“The board has ... decided to undertake a portfolio review to assess all opportunities in a considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value,” said AMP, which recently appointed Debra Hazelton as chair.
“The review may conclude that AMP’s current mix of assets and businesses delivers the best value for shareholders and may not result in a recommendation to pursue any specific transaction.”
AMP last week tapped Goldman Sachs alongside Credit Suisse as its investment banking advisers, to field a flurry of interest and inquiries surrounding the future of its businesses.
AMP’s shares surged 4.9 per cent, or 7.5c, to $1.62 on Wednesday as investors cheered the possibility of deal activity after a turbulent period for the wealth group.
AMP last month came under fire over its culture and the handling of harassment allegations, losing its chairman David Murray and fellow board member John Fraser.
The head of AMP Capital Boe Pahari – the subject of a 2017 sexual harassment complaint – was elevated to the role in July then demoted last week to his former role in infrastructure equity.
AMP’s Australia boss Alex
Wade abruptly left the company a month ago, in a departure linked to poor conduct and the sending of lewd photos to a female employee.
New chair Ms Hazelton said the board believed that AMP had high-quality businesses with significant strategic value.
“The board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital, and are confident that this will deliver long-term value for shareholders,” she said.
“However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”
AMP said it remained committed to its transformation strategy and was confident this would deliver longterm value for shareholders.
Macquarie Group and a host of private equity firms such as KKR have been linked to potential bids for AMP in the past two years.
The recent $3bn sale of AMP’s life insurance operations to Resolution Life has also made the wealth manager more attractive to some potential buyers.