AXA accepts NAB's offer

National Bank of Australia, the parent of Bank of New Zealand, has trumped AMP's offer to buy AXA Asia Pacific Holdings in a similar arrangement to pick up the Australasian businesses as the pension plan provider.

Thursday, December 17th 2009, 3:33PM 3 Comments

by Paul McBeth

NAB will offer investors either A$6.43 a share in cash, or a combination of cash and stock worth A$6.50 a share, a premium of 3.7% or 4.5% over the AMP offer worth $6.22 respectively.

The cash and stock option is made up of A$1.59 in cash and 0.1745 shares in NAB for every AXA AP share.

The deal values the Australian and New Zealand businesses at A$4.6 billion, and the merger would see NAB hold more than A$144.3 billion in funds under management through its AXA and MLC units. NAB would divest the company's Asian operations to AXA SA in much the same way as the AMP deal.

"The proposed merger of our wealth business and AXA Australia and New Zealand would combine two successful and highly complementary businesses, and will achieve attractive scale benefits in the Australian superannuation, retirement income and insurance markets," said NAB chief executive Cameron Clyne in a statement.

"The proposal is consistent with NAB's strategy of growing its wealth management franchise, most recently demonstrated through the acquisitions of Aviva Australia and a strategic alliance with JBWere."

Last month, the insurance company turned down an offer from AMP which valued the company at A$11 billion. AXA AP chairman Rick Allert said the board recommend the offer to shareholders, saying it's in the "best interests of minority shareholders" and superior to the AMP/AXA SA offer.

"We believe the NAB proposal recognises the strength of this franchise and its growth prospects," Allert said in a statement.

AXA AP shareholders will also receive a 9.25 Australian cents dividend in relation to the company's second-half results.

The deal is subject to due diligence, regulatory approvals and formal documentation to divest the Asian businesses to AXA SA.

Paul is a staff writer for Good Returns based in Wellington.

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Comments from our readers

On 17 December 2009 at 5:37 pm Barry Milner said:

Dear oh dear, how are the mighty fallen, only 15 short years since those heady days of demutualisation and the basket case once known as National Mutual fall prey to a bank. Oh the ignomy and a number of very good people who have been made redundant by a succession of failing AXA managements in the intervening years will be standing on the sidelines not knowing whether to laugh or cry.

On 17 December 2009 at 6:00 pm Helen said:

How come it too so long - This must have been in the pipeline for at least 3 years - whe I was at BNZ

On 21 December 2009 at 9:53 pm Gordon said:

Well, I wish AXA a better future than where it is now. As an AXA customer and formr shareholder I found it ridiculous that a call to the call centre results in at least 3 standard response letters (in separate envelopes); none which actioned my request. I wonder what brand name they will give it.