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November 10, 2009

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Insurer takeover effort founders

AUSTRALIAN insurer AXA Asia Pacific Holdings Ltd said yesterday it had rejected a US$10 billion takeover bid from AMP Ltd and its French parent, AXA SA.

The cash and share offer would have been among Asia's biggest takeovers this year and resulted in the breakup of AXA Asia Pacific, the Australian unit of giant French insurance company AXA SA. AXA Asia Pacific Chairman Rick Allert said the company's independent board committee agreed unanimously that the proposal, amounting to A$11 billion (US$10.13 billion), significantly undervalued the company.

"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," Allert said in a statement.

The proposal valued AXA APH shares at AU$5.34 each, more than 20 percent above last Friday's closing price of AU$4.30.

Allert said his company would consider a better offer.

"If they come back we'll look at whatever they come back with," Allert said.

Under the bid made last Saturday, AMP, an Australian fund manager and insurer, would buy all the shares in AXA APH, including AXA SA's controlling stake. It would then sell back AXA APH's Asian assets to AXA SA, but keep the Australian and New Zealand businesses.


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