views

Axa Asia arm shuns a 6bn break up bid

AXA Asia Pacific Holdings (Axa APH) yesterday rejected an A$11bn (&pound;6.1bn) break-up bid from Australian wealth management firm AMP and its parent company Axa, frustrating the French insurer&rsquo;s hopes of aggressively increasing its footprint in Asia.<br /><br />The news came as Axa, chaired by Henri de Castries, said it plans to raise &euro;2bn&nbsp; (&pound;1.8bn) in a rights issue to finance future acquisitions.<br /><br />Axa and AMP had clubbed together to put forward a complex deal under which AMP would pay a mixture of cash and shares for Axa APH at A$5.34 per share, valuing the company at around A$11bn. It would then sell on the&nbsp; firm&rsquo;s Asian assets to Axa in return for the French firm&rsquo;s 54 per cent stake in the Australasian operations and a further A$1.8bn in cash.<br /><br />But Axa APH chairman Rick Allert promptly rebutted the bid, saying it &ldquo;significantly undervalues&rdquo; the firm.<br /><br />&ldquo;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,&rdquo; he said.<br /><br />Axa previously tried to buy out Axa APH&rsquo;s assets in August 2004 for A$3.1bn, but was knocked back.<br /><br />Meanwhile, Axa&rsquo;s 15.6 per cent stake in China&rsquo;s fourth-biggest life insurer, Taikang, attracted bids from numerous foreign and domestic bidders, including Blackstone, Temasek, KKR and Bain Capital, valuing the holding at over $1bn (&pound;598m).<br /><br /><strong>RICK ALLERT<br />CHAIRMAN, AXA ASIA PACIFIC HOLDINGS<br /></strong>AXA Asia Pacific Holdings (Axa APH) is responsible for the Axa group&rsquo;s life insurance and wealth management operations in the Asia Pacific region, with divisions in Hong Kong, China, Singapore, Indonesia, the Philippines, Thailand, India, Malaysia, Australia and New Zealand.<br /><br />It was established as National Mutual in Australia in 1869 and demutualised in 1995, at which point Axa took control of a 51 per cent stake in the group in return for a $1.1bn investment. The firm kept its National Mutual name until 1999, at which point it underwent a rebranding to Axa APH to &ldquo;reflect its position in the global Axa group&rdquo;.<br /><br />Axa APH is chaired by Rick Allert, 66, who became a director at the group in 1995. He was formerly chairman of Australian retail chain operator Coles Group, winemaker Southcorp and Voyages Hotels and Resorts.<br /><br />His cohort at the helm of the firm is 45-year-old chief executive Andrew Penn, who has held the position since October 2006. He is also a director at investment management group AllianceBernstein in Australia and New Zealand.<br /><br />Axa APH previously fought off another takeover bid from its French parent back in August 2004, when Axa launched an A$3.1bn offer to buy out the 48.3 per cent of the firm it did not already own at A$3.75 a share. The proposed transaction valued Axa APH at A$6.5bn, in comparison to the nominal A$11bn price tag slapped on it by yesterday&rsquo;s joint offer from Axa and AMP.<br /><br />AXA chairman Henri de Castries is keen to up the group&rsquo;s presence in the Asia Pacific region. Outright ownership of Axa APH&rsquo;s assets would effectively double the group&rsquo;s exposure to Asian life insurance savings, including in China and India.