2nd UPDATE: AXA APH, National Australia Bank Nearing Agreement
March 22 2010 - 2:44AM
Dow Jones News
National Australia Bank Ltd. (NAB.AU) and AXA Asia Pacific
Holdings Ltd. (AXA.AU) said Monday they are close to reaching an
agreement on how the bank and wealth management firm's French
parent AXA SA (AXA) plan to carve up the assets of the target under
NAB's A$13.3 billion takeover bid.
The two companies said their self imposed deadline for
finalizing transaction documents has been extended from Monday
until March 29, just three days before the Australian Competition
and Consumer Commission is due to rule on the now defunct rival
proposal for AXA APH from AMP Ltd. (AMP.AU), and well in advance of
the ACCC's expected decision on NAB's bid.
The ACCC's ruling is a key remaining hurdle for the deal and
also a possible opportunity for AMP to reenter the takeover tussle
should the regulator block NAB's proposal or place onerous
restrictions on the deal.
One analyst at a Sydney-based research house said the relatively
short extension ot March 29 may mean the parties are close to
reaching an agreement, or could equally be driven by AXA APH's
desire to have an agreement ahead of any ACCC findings.
"The discussions to agree final transaction documents to
implement the proposal between AXA APH, NAB and AXA SA are at an
advanced stage," AXA APH and NAB said in separate statements.
AXA APH said its independent directors continue to recommend the
NAB takeover proposal, which offers either A$6.43 per share cash or
a combination of cash and NAB shares valued at A$6.25 based on
NAB's closing price Monday, in the absence of a higher bid and
subject to the endorsement of an independent valuation.
A spokeswoman for AXA APH said "the transaction remains on
track," but would not comment on what remained to be finalized in
the discussions between the parties.
A spokesman for NAB also refused to elaborate on their
statement, while AXA SA's spokesman had no comment.
Like AMP's earlier bid, NAB intends to retain AXA APH's
Australian and New Zealand businesses and on-sell the more valuable
Asian assets, led by its Hong Kong life insurance business, to AXA
SA, which owns 53.9% of AXA APH.
The short extension to the deadline, which previously expired
March 20, suggests both parties may be prepared to ink a deal
subject to requisite clearance from regulators in Australia, New
Zealand and Asia, where AXA APH operates in seven countries other
than Hong Kong.
The ACCC has said it doesn't expect to rule on NAB's Dec. 17 bid
until April 22, some three weeks after it expects to give its
verdict on the earlier bid from AMP, which has been rejected by AXA
APH's directors. The commission reviews the potential impact on the
affected industries of any takeover proposal made, and is also
reviewing AMP's market position if it loses out on AXA APH.
While AMP has not abandoned hope of securing AXA APH, analysts
believe it would run second in any bidding war to the much larger
NAB and must hope that the competition regulator would either rule
against NAB or impose such onerous conditions on its deal as to
make it unpalatable.
A spokeswoman for AMP declined to comment, referring to CEO
Craig Dunn's comments in February that the firm is awaiting the
outcome of the ACCC reviews.
Shares in NAB closed 19 cents weaker at A$26.71, AMP fell five
cents to A$6.26 and AXA APH continued to trade at a discount to
NAB's cash bid, but rose one cent to A$6.30.
-By Bill Lindsay, Dow Jones Newswires; 61-2-8272-4694;
bill.lindsay@dowjones.com
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