Axa Asia Pacific board backs $16.9b takeover deal

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SYDNEY - Axa Asia Pacific Holdings has recommended investors accept a sweetened takeover offer of at least A$13.3 billion ($16.9 billion) from France's biggest insurer Axa SA and AMP.

Axa SA and AMP, Australia's second-biggest asset manager, yesterday offered cash and stock valuing Axa Asia Pacific at a minimum A$6.43 a share.

That was 50 per cent higher than Axa Asia Pacific's shares before their initial offer a year ago and matched a bid from National Australia Bank that the country's competition watchdog rejected two months ago.

The regulator approved an earlier proposal by AMP in what is set to be Australia's largest financial services takeover in two years.

Axa SA, the French insurer that owns 54 per cent of Axa Asia Pacific, injected more cash into the deal in an attempt to take full control of operations in a region where wealth is growing at the world's quickest rate.

"A majority of the independent directors believe AMP and Axa SA's proposal provides minority shareholders with appropriate value for their investment," said Axa Asia Pacific chairman Rick Allert.

Five of six independent directors recommend investors accept the bid, including Allert, while another is seeking further information.

The proposal is at least the fourth attempt by Axa SA to buy out its Asian units since 2004.

The Paris-based company withdrew a A$3.4 billion offer in October that year after it was rejected, before returning with a new proposal in 2009 with AMP. After that was rejected, Axa SA joined NAB for this year's blocked bid. The Australian Competition & Consumer Commission barred NAB's A$13.3 billion agreed offer for Axa Asia Pacific in September, citing competition concerns.

Axa SA needs to win support of all the independent board members at the Melbourne-based unit to complete the takeover. Their approval is subject to the review of an independent panel and the absence of a "superior proposal".

Axa Asia Pacific last year rejected the unsolicited A$10 billion bid from its parent and AMP because of opposition from independent board members.

Axa Asia Pacific handles Axa's life-insurance and wealth-management businesses in the region. It has units in Hong Kong, China, Singapore, Indonesia, the Philippines, Thailand, India, Malaysia, Australia and New Zealand.

A takeover would be the largest of an Australia-based financial company since Westpac bought St. George Bank in 2008. AMP is paying A$4.15 billion for the Australian and New Zealand operations.

That would make AMP the biggest manager of financial planners in Australia and the leader in the A$235 billion market for individual pension funds, it said.

Axa SA will pay A$1.97 billion to take control of the rest of Axa Asia Pacific and A$696 million to retire debt at the Australian and New Zealand units.

The proposed deal values Axa SA's existing stake in Axa Asia Pacific at A$7.17 billion at that price.

AMP is paying 16 times estimated earnings of the Australian and New Zealand businesses for fiscal 2011, it said.

That matches the multiple paid by NAB for Aviva's local wealth-advisory and life-insurance units last year. It's higher than the 13.

AMP will offer 0.73 of a share and the variable cash element to take the value of the offer to A$6.43 for each Axa Asia Pacific share. Axa SA will contribute cash to maintain that level as long as AMP stock is worth between A$4.50 and A$5.60 each.

- Bloomberg