AMP to bypass life sale vote
Markets operator ASX will not require AMP to seek shareholder approval for the $3.3 billion sale of its life insurance and mature products business, in a setback for those shareholders opposed to the deal.
AMP said last night that the ASX had confirmed the transaction did not represent the disposal of its main undertaking and that there was no requirement to put it to a shareholder vote.
Shareholders including boutique investment house Merlon Capital and contrarian investor Allan Gray said last week that the price was as much as $2bn below fair value and called for it to be put to shareholders because of its size and significance to AMP.
The Australian Council of Superannuation Investors also said it wanted shareholders to have a say but did not have a view on the price of the deal.
Under ASX rules, the markets operator can require a company to seek shareholder approval if the assets being dealt with account for 50 per cent or more of any of four measures: assets, revenue, earnings and aftertax profits.
But AMP said last night that information provided to the ASX from its December financial year accounts showed that the deal did not meet any of the ASX “rule of thumb” measures.
The business accounted for 34 per cent of revenue, 32 per cent of earnings, 31 per cent of after-tax profit and 25 per cent of assets.
AMP shares fell 24 per cent on the day the deal was announced, on their way to a record low of $2.31.
They rose 6c to close at $2.67 yesterday ahead of the AMP statement.